China’s investment in Africa’s lithium mines begins to pay off with new mineral supply chains created

Traditionally, Australia has been China’s main supplier of spodumene – it accounted for 79 per cent of China’s imports of spodumene in 2023, according to S&P Global Commodity Insights.

But as Australia and other top global lithium producers draw up their own critical mineral plans, with exports tightening, “China has continued to explore steady supplies of lithium, including in Africa,” a recent article by S&P said.

Kamativi mine is a joint venture between China’s Sichuan PD Technology Group, a subsidiary of a Chinese-listed entity Yahua Group, and local firm Defold Mine. It used to produce tin before it was shut down in 1994 when international tin prices plummeted to unsustainable levels.

“Underpinned by Zimbabwe’s abundant lithium resources, coupled with Yahua Group’s notable legacy hard-rock lithium mining, we are full of expectations and confidence to further increase our investment towards the development of Zimbabwe’s mining sector,” Meng Yang, chairman of Yahua Group, said.

Major Chinese companies, including Zhejiang Huayou Cobalt, Sinomine Resource Group and Chengxin Lithium Group, all completed the construction or upgrade of lithium processing plants in Zimbabwe last year.

London-based Benchmark Minerals estimates that lithium production from Africa will almost treble in this year. In 2023 Africa accounted for just 4 per cent of mined lithium globally, but it is forecast to account for 10 per cent of global supply this year, Benchmark said.

Benchmark forecasts that African lithium mines will produce 111,000 tonnes in 2024, up 201 per cent from the relatively small base of 37,000 tonnes produced the previous year.

“China holds the majority of the world’s refining capacity. However, their domestic mine supply cannot keep up,” Claudia Cook, a lithium analyst at Benchmark, said. “What sets China apart is that it already has the supply chain to utilise African lithium resources, as well as the expertise and capital.”

Beijing currently controls the global lithium-ion battery industry, while it also dominates much of the mineral’s processing, as well as others such as cobalt and graphite. To get the raw materials it needs, China has ramped up its procurement of battery minerals from Africa and other places.

But it has created disquiet from Washington over Beijing’s grip on critical metal supply chains.

Observers at the United States Institute of Peace say it is an example of America looking to Africa to help overcome a critical mineral vulnerability. Currently, the US produces little to no natural graphite, meaning it is virtually 100 per cent reliant on imports for graphite supply, with China being the leading import source, the institute said.

“China’s 2023 export restrictions on graphite and the potential for trade restrictions on other critical minerals will likely intensify US and allied interest in Africa,” it said in a recent study.