China’s Strategic Move to Secure Future Lithium Supplies
Chinese mining and refining companies are driving a significant increase in African lithium production, despite concerns about potential oversupply. Africa is projected to contribute nearly 11% of global lithium supply this year, a substantial increase from the negligible levels seen at the beginning of the decade. This share is expected to exceed 14% by 2028, according to S&P Global Commodity Insights.
The surge in lithium prices during 2021 and 2022 triggered substantial investment from Chinese companies into African lithium production. However, the market has since experienced a decline in prices by over 80% due to increased supply and slower-than-expected electric vehicle sales. Despite a predicted global surplus this year, China, which dominates the global lithium chemicals market, continues to expand its refining capacity and rely more heavily on international sources. Claudia Cook, an analyst at Benchmark Mineral Intelligence, observes that Africa is increasingly filling the gap created by growing resistance to Chinese involvement in Western lithium projects.
Major Investments and Future Developments in African Lithium
Zimbabwe, responsible for over two-thirds of Africa’s lithium output, has attracted substantial investment from Chinese firms such as Zhejiang Huayou Cobalt Co., Sinomine Resources Group Co., and Chengxin Group Co. These companies have poured billions into developing mines and processing facilities. Additionally, Chinese-backed projects are underway in Mali, Namibia, and Nigeria.
According to Lukasz Bednarski, S&P’s principal research analyst for lithium and battery metals, 15 new or expanded mines across Africa are expected to begin production by 2030. Most of these projects are deemed sustainable even at current price levels. The increase in capacity is set to coincide with a projected return to a market deficit following a peak global surplus in 2027, as reported by Benchmark Mineral Intelligence.
While Zimbabwe’s production is relatively transparent due to industrial operations, supply from countries like Nigeria, which has traditionally exported lithium ore extracted using rudimentary methods, is more challenging to track. Nigeria was the second-largest source of African lithium over the past year and a half. The country recently launched its first lithium processing facility and has several China-backed projects under development, with the goal of regulating the trade and boosting revenue.
Western Companies and Future Supply Dynamics
Western companies are also investing in African lithium. Atlantic Lithium Ltd., based in Sydney, is establishing Ghana’s first lithium mine, while Andrada Mining Ltd. and Tantalex Lithium Resources Corp. are developing projects in Namibia and the Democratic Republic of Congo, respectively. Additionally, ventures led by British businessman Algy Cluff and Australian entrepreneur Hugh Morgan are working to produce significant lithium volumes in Zimbabwe and Nigeria.
Despite Australia, Chile, and China accounting for approximately 70% of global lithium supply this year, African mines are projected to see their combined share decrease to just over 50% by the end of the decade. This shift highlights a broader trend toward diversifying lithium production sources, as noted by Claudia Cook of Benchmark Mineral Intelligence.