To ensure its dominance in lithium, China completes refining plants in Zimbabwe
China, to secure a global advantage, no longer limits itself to extracting lithium in Africa, but now several companies are completing “white gold” refining plants in Zimbabwe. Major Chinese companies, including Zhejiang Huayou Cobalt, Sinomine Resource Group and Chengxin Lithium Group, have all completed construction or upgrades of lithium processing plants in Zimbabwe in the past year.
The southern African country is home to one of the world's largest reserves of rock-based lithium, attracting Chinese companies seeking raw materials for lithium-ion batteries, used to power a range of products from electric vehicles to solar panels . This means that in the global transition to green energy, Zimbabwe's lithium reserves are a valuable asset, despite discoveries made in the US and elsewhere.
Beijing currently controls the global lithium-ion battery industry mainly with giants CATL and BYD, and also dominates much of the ore processing. To get the raw materials it needs, China has increased its purchases of lithium from Africa and elsewhere, amid disquiet in Washington over Beijing's grip on supply chains for the critical metals.
This grip became even tighter last year, when African lithium exports, which mostly go to China, rose sharply between August and November. During that time, the companies commissioned processing facilities for two products – primarily lithium concentrates spodumene and petalite – to be exported to China for further processing into lithium-based chemicals for the production of batteries and other electronic products.
But it was not a gradual increase. After Chinese companies put lithium processing plants online in May 2023, exports began to increase, rising from 16,000 tonnes in June to 36,000 tonnes in August – before more than doubling to 84,000 tonnes in November.
Adam Megginson, pricing and data analyst at Benchmark Mineral Intelligence, said 2024 will be an even bigger year, with several major projects coming online that will see Zimbabwe's lithium capacity triple compared to 2023.
Currently, Megginson said, plants in Zimbabwe produce spodumene or concentrated petalite which, while not completely crude products, require further refining. This process turns the concentrate into chemicals that can be used in the production of lithium-ion batteries with much less processing in China. Zimbabwe is happy with this type of development, because it allows it to increase the share of added value produced locally, with local labour.
Most Chinese lithium producers operating in Africa, however, prefer to continue refining the material in China, because doing so keeps costs low. In addition to the significant expense of building or improving refining capabilities in a different country, it is also more difficult to staff these projects with competent personnel, whereas such people are readily available in China. However, this increases the cost of labor in China as well as posing environmental problems because the production concentrated entirely in one logo in the world, with the intervention of heavy chemical products, also causes environmental pollution.
Benchmark predicts that by the end of the decade, Africa will contribute a 14 percent share of the global supply of lithium raw materials, up from 4 percent last year. If this evolution is true, part of the initial processing will still have to be carried out in Africa and the companies that prepare for these changes will be the ones that take advantage of them competitively.
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The article China to secure dominance in lithium completes refining plants in Zimbabwe comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-cina-per-assicurarsi-la-dominanza-nel-litio-completa-impianti-di-raffinazione-in-zimbabwe/ on Sun, 10 Mar 2024 16:30:45 +0000.