Zimbabwe softens stance on local lithium processing after price collapse
03/10/2024 11:30
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Govt had given miners 4 months to submit refining plans
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Miners struggling with low prices, tough operating
conditions
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Companies scaling down production, cutting jobs
By Nyasha Chingono
HARARE,Oct 3 (Reuters) - Zimbabwe has softened its
requirements for lithium miners to process the mineral locally,
a government official said on Thursday, as the industry battles
to survive a price slump over the past year.
Africa's top lithium producer, Zimbabwe had last year given
producers up to March 2024 to submit plans of how they would
produce battery-grade lithium in the impoverished southern
African country.
Prices of lithium, which is mainly used in battery
technologies, have fallen more than 80% in the past year largely
due to overproduction from China and a drop in demand for
electric vehicles.
The price collapse has forced companies like Chinese battery
giant CATL 300750.SZ to suspend production at certain mines.
Albemarle ALB.N , the world's top lithium miner, implemented a
second round of cost cuts earlier this year and laid off
workers.
In Zimbabwe, lithium miners including Sinomine Resource
Group's 002738.SZ Bikita Minerals, have been forced to cut
production and lay off workers as the impact of weak prices has
been compounded by the country's poor infrastructure, currency
volatility and policy inconsistencies.
The Zimbabwe government would now take a measured approach
in its quest to localise lithium processing, deputy mines
minister Polite Kambamura told Reuters.
"We are now considering them on a case by case basis and
also considering the level of investments already put in the
country," Kambamura said.
Chinese firms including Sinomine, Zhejiang Huayou Cobalt
603799.SS , Chengxin Lithium Group 002240.SZ Yahua Group
002497.SZ and Canmax Technologies 300390.SZ have spent more
than $1 billion over the past three years to acquire and develop
lithium projects in Zimbabwe.
"Some commenced mining operations five months before the
deadline, so we are considering where the project is," he added.
Sinomine has said it plans to spend up to $500 million
building a lithium sulphate plant at Bikita within the next five
years.
Huayou has said it is conducting feasibility studies for a
lithium sulphate plant at its Arcadia mine.
Kambamura said the government was open to dialogue with
lithium miners over their struggles.
"We understand the prices are low but they are beginning to
firm up. The fact that there are upcoming projects means the
environment is favourable," he added.
(Reporting by Nyasha Chingono; Editing by Nelson Banya and
Angus MacSwan)
((NyashaMark.Chingono@thomsonreuters.com;))