Zimbabwe has relaxed its local processing requirements for lithium miners, according to a government official, as the industry faces challenges from a significant price drop over the past year. As Africa’s leading lithium producer, Zimbabwe had previously set a deadline for producers to submit plans for producing battery-grade lithium domestically by March 2024.
Lithium prices have plummeted by more than 80% in the last year, primarily due to overproduction in China and reduced demand for electric vehicles. This price collapse has led major companies, such as Chinese battery giant CATL, to suspend operations at some mines. Albemarle, the world’s largest lithium producer, has implemented further cost cuts and made layoffs to adapt to the changing market.
In Zimbabwe, lithium miners like Sinomine Resource Group’s Bikita Minerals have been forced to scale back production and reduce their workforce, grappling with not only weak prices but also poor infrastructure, currency volatility, and inconsistent policies.
Deputy Mines Minister Polite Kambamura indicated that the government will now assess local processing requirements on a case-by-case basis, taking into account the investments already made in the country.
“We are now considering them on a case by case basis and also considering the level of investments already put in the country,” Kambamura told Reuters.
Chinese companies, including Sinomine, Zhejiang Huayou Cobalt, Chengxin Lithium Group, Yahua Group, and Canmax Technologies, have invested over $1 billion in Zimbabwe’s lithium projects over the past three years.
Some companies have commenced mining operations ahead of the deadline, prompting the government to evaluate the status of these projects. For instance, Sinomine plans to invest up to $500 million in building a lithium sulfate plant at its Bikita site within the next five years, while Huayou is conducting feasibility studies for a similar plant at its Arcadia mine.
Kambamura expressed the government’s willingness to engage in dialogue with lithium miners about their challenges, acknowledging the current low prices but noting signs of market stabilization. “We understand the prices are low but they are beginning to firm up. The fact that there are upcoming projects means the environment is favorable,” he added.
