Zimbabwe has relaxed its stance for lithium miners to process the material locally, a government official said as the industry struggles to recover from a year-long price drop.
Reuters reports that Zimbabwe, Africa's largest lithium producer, gave producers until March 2024 to submit proposals for producing battery-grade lithium in the poor southern African country.
Prices for lithium, which is mostly used in battery technologies, have dropped by more than 80% in the last year, owing partly to overproduction in China and a reduction in demand for electric vehicles.
The price slump has pushed corporations such as Chinese battery giant CATL to halt operations at specific locations. In Zimbabwe, lithium miners, like Sinomine Resource Group's Bikita Minerals, have been forced to reduce production and lay off workers as a result of low pricing, which has been exacerbated by the country's poor infrastructure, currency volatility, and policy inconsistency.
Zimbabwe's deputy mining minister, Polite Kambamura, said that the government would now take a methodical approach to localising lithium processing.
"We are now considering them on a case-by-case basis and also considering the level of investments already put in the country," said Kambamura.
Chinese companies such as Sinomine, Zhejiang Huayou Cobalt, Chengxin Lithium Group, Yahua Group, and Canmax Technologies have invested more than $1 billion over the last three years to acquire and develop lithium mines in Zimbabwe.
Kambamura said that the administration was willing to talk with lithium miners about their struggles.
"We understand the prices are low, but they are beginning to firm up,” he said.
“The fact that there are upcoming projects means the environment is favourable."
Mathew Nyaungwa, Editor in Chief, Rough&Polished
