Chinese mining giants Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co. are partnering with a Zimbabwean state-owned company to develop a lithium deposit in Zimbabwe, conducting feasibility studies to construct a mine and processing plant at Sandawana, despite a nearly 90% drop in lithium prices since late 2022. They plan to invest $250-300 million and anticipate producing 500,000 tons of lithium concentrate annually, with an optimistic outlook for price recovery in the coming years.
Chinese mining companies Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co. are advancing their investment in a lithium mining project in Zimbabwe, in collaboration with a state-owned entity, despite recent significant declines in lithium prices. The firms are already engaged in other lithium ventures within Zimbabwe and are currently executing a feasibility study with intentions to establish a lithium mine and processing facility at Sandawana, situated in southern Zimbabwe, as reported by Bloomberg. This initiative was confirmed by Trevor Barnard, the acting CEO of Kuvimba Mining House, which holds ownership of the asset and previously announced the agreement in July without disclosing the identities of the partners involved. Over the past two years, Zimbabwe has emerged as a pivotal player in the global lithium market, buoyed by a price surge experienced in 2021 and 2022 that attracted considerable interest and investment from Chinese firms eager to exploit the country’s abundant lithium deposits. Although there has been a staggering nearly 90% drop in lithium spot prices since late 2022, primarily due to an oversupply and declining demand for electric vehicles, Chinese companies are steadfast in their goal to secure essential raw materials for their domestic refining operations. The investment projected by Huayou and Tsingshan ranges between $250 million and $300 million for the construction of their lithium mining and processing plant, which aims to yield approximately 500,000 tons of lithium concentrate per annum, according to Mr. Barnard. Mr. Barnard anticipates a gradual recovery in lithium prices over the coming year, with a more robust rebound expected in 2026 and 2027 as current production surpluses transition into deficits. Despite the prevailing low prices, he expressed confidence in the economic sustainability of the project, stating, “Our economics show that we will still be a profitable business even at the current pricing levels.” Across the African continent, there is a notable proliferation of active lithium mining and exploration projects in countries such as Namibia, Mali, Ghana, and the Democratic Republic of the Congo (DRC). Nonetheless, these African initiatives remain modest compared to the extensive array of projects being developed across the Americas, Australia, and Europe.
The article discusses the collaborative efforts of Chinese mining companies and a Zimbabwean state-owned firm to develop a lithium deposit amidst a downturn in lithium prices. It highlights Zimbabwe’s growing significance in the global lithium market and the strategic responses of these companies to secure resources, focusing on economic projections and anticipated market trends.
In summary, the partnership between Chinese mining companies and a Zimbabwean state-owned entity to develop lithium resources illustrates not only the ongoing interest in Zimbabwe’s mineral wealth but also highlights the resilience of these firms in the face of declining prices. With significant investments planned and positive economic forecasts, this project may play a crucial role in redefining the lithium supply landscape, even amid challenges posed by global market fluctuations.
Original Source: www.newzimbabwe.com
