Foreign media: Chinese companies open lithium processing plants in Zimbabwe.
According to a report from Reference News on July 7th, a Chinese mining company officially opened a lithium processing plant worth about $300 million in Zimbabwe on July 5th.
Zimbabwe has the largest lithium reserves in Africa and has attracted investors from many countries in recent years, but China still dominates the market.
Zimbabwean President Emmerson Mnangagwa attended the inauguration ceremony. He stated that this factory, built by Zimbabwe Lithium under China’s Huayou Cobalt subsidiary, can process approximately 4.5 million tons of hard rock lithium annually for export.
The lithium processing plant is located in the Goromonzi area, tens of kilometers southeast of Harare, the capital of Zimbabwe.
Mnangagwa said, “Lithium is a mineral of today and tomorrow… Its added value will make our country an emerging and competitive participant in the global lithium value chain.”
He urged the company to enhance its professional technology and help Zimbabwe and other African countries eventually produce lithium batteries and related components locally.
Lithium is an important component of electric vehicle batteries. Since last year, Zimbabwe has tightened controls on raw lithium exports. Like Indonesia and Chile, it aims to maximize mineral revenue by requiring mining companies to invest in local refining and processing industries before exporting.
The rapid development of the new energy industry and the uneven distribution of global lithium resources have attracted a large number of Chinese enterprises to join the overseas lithium mining competition. Tianqi Lithium, Ganfeng Lithium, China Minmetals Resources, Huayou Cobalt, and other listed companies have already established overseas lithium mining layouts, and many more are on their way.
On August 14th, Hengtong shares announced that its wholly-owned subsidiary plans to subscribe for $3 million in convertible bonds issued by Yuheng Lithium Holdings Limited. The majority of this $3 million investment will be used for exploration of 16 lithium mine rights in Zimbabwe.
Hengtong shares test the new energy field
In fact, Hengtong shares had previously shown signs of layout in the new energy field. On May 4th this year, Hengtong shares announced that it planned to establish a subsidiary through its Hong Kong subsidiary in Zimbabwe to mainly engage in logistics business, mining investment business, international trade business, etc. This was the first sign that Hengtong shares expanded their business map to overseas markets and the new energy mining market.
Hengtong Shares is a modern comprehensive logistics enterprise under Nanshan Group Co., Ltd., which integrates port construction and operation, LNG trading and logistics services, gas station operations, road transportation services as well as driver training. It was listed on Shanghai Stock Exchange on June 30th，2015.
On August 16th，a company spokesperson told Securities Daily reporters，“In recent years，the company has been trying to expand into new areas while maintaining its core businesses。However，the company has always adhered to prudent investment principles。This convertible bond project is also an attempt by the company in the lithium mining field。”
In recent years，the “lithium mine battle” among domestic enterprises has become increasingly fierce。Just recently，the exploration mining rights of Malkanggada Lithium Mine，which started at 3.19 million yuan，were eventually sold for 4.206 billion yuan, an increase of more than 1317 times from the starting price。The final transaction price of the Lijiagou North Lithium Mine in Jinchuan County, which was auctioned almost at the same time, also increased by more than a thousand times compared to the starting price.
Shen Meng, Executive Director of Xiangsong Capital, said in an interview with Securities Daily reporters that lithium mines are upstream resources for lithium batteries. With the rapid growth of new energy vehicles worldwide, there is long-term demand for lithium batteries and controlling more mineral resources is beneficial to stabilize the lithium battery supply chain.
Zhang Xiaorong, Dean of DeepTech Research Institute, also believes that the scarcity and tight supply of domestic lithium resources have led to strong market demand for lithium mines. Secondly, the long-term development trend of the lithium industry is still promising, especially under expectations of increasing demand in areas such as new energy vehicles; therefore, lithium resources are still considered to have potential value.
Zimbabwe’s Lithium Mines Become New Favorites
With the continuous development of the new energy industry，Chinese enterprises have set their sights on Africa’s lithium resources and strive to seize opportunities at its source.
Shen Meng believes that due to uneven distribution globally，investing in overseas lithium mines has become a trend。However，he also pointed out that companies need to pay attention to differences between overseas business environments and domestic ones、and even potentially huge differences。They should carefully consider opportunities for overseas investment and fully evaluate and control risks。
As an emerging major country in terms of lithium resources，Zimbabwe’s minerals are mainly distributed across its north-south “Great Dyke” and Manicaland Province’s “Greenstone Belt”. According to a report by US Geological Survey (USGS)，Zimbabwe has the seventh-largest lithium resource reserves globally and the largest in Africa，with lithium resources of 3.67 million tons LCE and an estimated lithium production of about 42,560 tons LCE in 2022，accounting for 0.6% of global total supply。Its resource reserves and production rank seventh and tenth respectively worldwide。It is expected that Zimbabwe’s lithium resource supply will reach 113,000 tons LCE by 2025, accounting for approximately 8.3% of global total supply，making it an emerging major country in terms of lithium resources.
As a country along the “Belt and Road” initiative with abundant mineral resources，Zimbabwe has become an important investment destination for many new energy companies.
In fact, a group of listed companies represented by China Minmetals Resources, Huayou Cobalt, Shengxin Lithium Energy have already taken the lead in laying out Zimbabwe’s lithium mining market. As early as the end of 2021, Huayou Cobalt acquired a100% stake in Prospect Lithium Mines Limited in Zimbabwe through its subsidiary Huayou International Mining