Zimbabwe has relaxed its requirements for lithium miners to process the mineral locally as the industry grapples with a significant price decline, a government official announced on Thursday.
Last year, the country, Africa’s largest lithium producer, had set a deadline of March 2024 for producers to submit plans detailing how they would produce battery-grade lithium domestically.
However, global lithium prices, mainly driven by overproduction in China and a drop in demand for electric vehicles, have plummeted by over 80% in the past year.
The collapse in prices has forced major players like Chinese battery giant CATL to halt production at some mines. Albemarle, the world’s largest lithium producer, also implemented cost-cutting measures and layoffs earlier this year.
In Zimbabwe, miners like Sinomine Resource Group’s Bikita Minerals have scaled back production and laid off workers, as poor infrastructure, currency volatility, and inconsistent policies compound the effects of weak prices.
Deputy Mines Minister Polite Kambamura told Reuters that the government is now taking a more flexible approach to its lithium processing mandate.
“We are considering miners on a case-by-case basis, taking into account the level of investment they’ve made,” Kambamura said.
Chinese companies, including Sinomine, Zhejiang Huayou Cobalt, Chengxin Lithium Group, Yahua Group, and Canmax Technologies, have collectively invested more than $1 billion in Zimbabwe’s lithium sector over the past three years.
Kambamura noted that some firms began mining operations just months before the processing deadline, and the government is adjusting expectations accordingly.
Sinomine, for example, plans to invest up to $500 million in building a lithium sulphate plant at its Bikita mine over the next five years, while Huayou is conducting feasibility studies for a similar plant at its Arcadia mine.
While acknowledging the current low prices, Kambamura expressed optimism about the future, stating, “Prices are starting to firm up, and the ongoing projects indicate that the investment climate remains favorable.”
