Zimbabwe: Sinomine Plans $500m Lithium Refinery in Zimbabwe Despite Losses

3 October 2024
Daba Finance (Abidjan)

TLDR

  • Sinomine Resource Group's Bikita Minerals to invest $500 million in Zimbabwean lithium refinery, seeking investors due to limited funds.
  • Lithium price surge in 2021-2022 attracted Chinese companies like Sinomine, boosting Zimbabwe's metal production.
  • Zimbabwe government promotes local lithium processing to enhance economic value and discourage raw ore exports.

Sinomine Resource Group's Zimbabwean unit, Bikita Minerals, plans to invest $500 million in a lithium refinery over the next 3-5 years, despite current losses due to weak metal prices.

Managing Director Xuedong Gong acknowledged the company will need to borrow from investors to fund the project, given its limited financial resources.

Sinomine is among several Chinese companies that entered Zimbabwe during a lithium price surge in 2021-2022, transforming the country into a significant producer of the metal. Zimbabwe's government has encouraged investors to process lithium locally rather than export raw ore or concentrate.

Key Takeaways

While lithium spot prices have dropped nearly 90% in the past two years, Chinese companies are betting on future price recovery as production surpluses are expected to turn into deficits, driven by the demand for rechargeable batteries. The project aligns with Zimbabwe's goals to boost domestic processing of its natural resources. However, Sinomine faces immediate financial challenges and will rely on external funding as it navigates the current market downturn. The future of the lithium market will depend on the balance between production surpluses and the growing demand for electric vehicle batteries.

Read the original article on Daba Finance.

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