New focus on Zim Lithium

MANYIKA KANGAI

Minerals like lithium, nickel, and copper are in demand as a result of the global transition to battery-powered renewable energy.

A new focus has been placed on Zimbabwe, which has the largest lithium reserve in Africa and the sixth largest lithium reserve in the world, as a result of the need to increase lithium production, which was previously primarily concentrated in Australia, Chile, and Brazil.

On the African continent, Zimbabwe is thought to have the most active lithium exploration projects.

Offshore investors have  made investments  in Zimbabwe including  Australian Stock Exchange (ASX) listed Prospect Resources, Meeka Metals, London listed Premier African Minerals, Galileo  and Toronto Stock Exchange listed Li3 Lithium Corp.

However, the most aggressive investors have come from the east as Chinese investors have already invested over US$2bn  dollars buying mines and building processing plants in about 2 years with

more deals still in the pipeline.

This week they launched an association, the Association of Chinese

New Energy Miners, to promote the development of the industry and enhance communication between them and local stakeholders including the government while safeguarding the rights and interests of its members.

Entities involved in the initiative include, Prospect Lithium Zimbabawe, Sabi Star Mine, Gwanda Lithium, Sinomine Bikita Minerals Spodumene Project, Kamativi Lithium Project, and Global Platinum Resources. Who are the Chinese investors behind these entities?

Zhejiang Huayou Cobalt is a Shanghai Stock Exchange listed company founded in 2002 by Chinese billionaire Chen Xuahua.

The company specializes in the manufacture of lithium batteries

and advanced cobalt materials.

The company supplies cobalt to Apple and is one of their approved smelters.

At some point, Huayou supplied 20% of the cobalt in Apple’s batteries. The company is also collaborating with Ford to make electric vehicle batteries more affordable.

In April 2022, Zhejiang Huayou purchased 87% of Arcadia Mine which was under Prospect Lithium Zimbabwe (PLZ) from Prospect Resources for US$378m in cash and invested another US$300m to build a processing plant that was commissioned in July 2023.

Sinomine Resources is a Shenzhen Stock Exchange listed company founded in 1999.

The new energy business offers battery-grade lithium hydroxide, battery-grade lithium carbonate, and battery-grade lithium fluoride for manufacturing of lithium-ion batteries.

Sinomine operates in over 40 countries.

In January 2022, Sinomine purchased Bikita Minerals, one of Africa’s oldest mines for US$180m  and invested another US$300m to construct a spodumene concentrate plant and expand the existing petalite plant.

Chengxin Lithium Group is a Shenzhen listed company that was founded in 2001 and supplies companies like BYD, the world’s leading manufacturer of electric vehicles and CATL, the

world’s largest lithium battery manufacturer.

Chengxin bought some claims in Buhera for US$77m and then invested US$130m to develop the mine and construct a flotation

plant with plans to build a spodumene concentrator.

Canmax Technologies is a Shenzhen Stock Exchange listed company that was previously known as Suzhou TA&A Ultra Clean Technology was found in 1997 and supplies materials for semiconductors.

Canmax is also the single biggest shareholder in London Listed Premier African Minerals, with a 13.38% stake and has financed the construction of a processing plant at the Zulu lithium mine 80km from Bulawayo controlled by Premier. It will also be the off taker of the

concentrates.

The appetite for investment from the east is a great opportunity for Zimbabwe.

The fact that the Chinese investors are listed on China’s capital markets means that Zimbabwe is getting exposure on

these markets as a viable investment destination.

As these investors succeed, they can be Zim’s brand ambassadors and attract other investors.

Manyika Kangai has over 17 years of experience facilitating and advising African businesses and governments on China-Africa trade and investment deals. He is fluent in mandarin and holds a

Bachelor of Economics degree in Finance from Donghua University in Shanghai, a certificate in Early Stage Investment from University of Cape Town (UCT) Graduate Business School and a certificate in

Private Equity and Venture Capital from Harvard Business School in Boston, Massachusetts.