- Chinese miners and refiners are driving a surge in African lithium output.
- Across Africa, 15 mines are under development or being expanded and are due to be produced by 2030.
Chinese miners and refiners are driving a surge in African lithium output, shrugging off concerns over a glut to lock in future supplies of the critical battery metal.
The continent is projected to account for almost 11 per cent of global supply this year, compared with close to zero at the start of the decade, according to S&P Global Commodity Insights. That’s projected to increase to more than 14 per cent by 2028.
A spike in lithium prices through 2021 and 2022 fueled a wave of investment by Chinese companies in African production. The metal has since plunged more than 80 per cent after supply increased while sales of electric vehicles lag expectations.
Despite an anticipated global production surplus this year, China — which makes most of the world’s lithium chemicals — continues to expand its refining capacity and is growing more dependent on material from overseas, said Claudia Cook, an analyst at Benchmark Mineral Intelligence. “As there is growing resistance to Chinese involvement in lithium projects in the Western world, Africa is well-positioned to fill this feedstock gap.”
Over two-thirds of the continent’s output comes from Zimbabwe. Chinese firms, including Zhejiang Huayou Cobalt Co., Sinomine Resources Group Co., and Chengxin Group Co., have spent billions of dollars commissioning mines and processing plants. Companies from China or with Chinese backing are also developing projects in Mali, Namibia, and Nigeria.
Across Africa, 15 mines are under development or being expanded and are due to be produced by 2030, according to Lukasz Bednarski, S&P’s principal research analyst for lithium and battery metals. Most are “sustainable,” even at current prices, he said.
Benchmark says that new capacity will come online as the market is predicted to return to a deficit following a peak global lithium surplus in 2027.
While production from Zimbabwe is more transparent due to the presence of industrial mines, supply from nations like Nigeria—which until now has exported lithium ore extracted with rudimentary tools—is harder to track. That country was the second-biggest source of African lithium during the past year and a half, said Thomas Matthews, battery metals analyst at CRU Group.
According to Matthews, over half of Africa’s production last year came from hand-dug or small-scale activity. That is changing, though, with “growth in output from industrial operation expected to eclipse the informal activity.”
Nigeria opened its first lithium processing facility in May and has several more China-backed projects under development. The government is seeking to regulate trade and maximize revenue.
Low-grade material from Africa made up more than a quarter of all China’s lithium imports on a metal-contained basis during the first half of this year, Matthews said.