Chinese miners and refiners are driving a surge in African lithium output, pushing the continent to account for almost 11% of global supply this year, up from nearly zero at the start of the decade, according to S&P Global Commodity Insights. This share is expected to rise to over 14% by 2028.
Thank you for reading this post, don't forget to subscribe!A spike in lithium prices during 2021 and 2022 fueled significant investment by Chinese companies in African production. Although lithium prices have since plunged more than 80% due to increased supply and lagging electric vehicle sales, China continues to expand its refining capacity and increasingly relies on overseas materials, said Claudia Cook, an analyst at Benchmark Mineral Intelligence. “As resistance to Chinese involvement in lithium projects grows in the Western world, Africa is well-positioned to fill this feedstock gap,” she noted.
More than two-thirds of Africa’s lithium output comes from Zimbabwe, where Chinese firms, including Zhejiang Huayou Cobalt Co., Sinomine Resources Group Co., and Chengxin Group Co., have invested billions in mines and processing plants. Chinese-backed projects are also underway in Mali, Namibia, and Nigeria.
Across Africa, 15 lithium mines are under development or expansion, expected to be operational by 2030, according to Lukasz Bednarski, S&P’s principal research analyst for lithium and battery metals. He stated, “It’s really significant growth in the last three years.”
This new capacity will come online as the market is predicted to return to a deficit following a peak global lithium surplus in 2027, Benchmark reports.
Nigeria’s Lithium Production and Development
While Zimbabwe’s industrial mines offer more transparency, Nigeria’s lithium supply, largely from rudimentary extraction methods, is harder to track. Nigeria was the second-largest source of African lithium over the past year and a half, said Thomas Matthews, battery metals analyst at CRU Group. More than half of Africa’s production last year came from small-scale activities, but this is changing with the growth of industrial operations expected to surpass informal activity.
Nigeria opened its first lithium processing facility in May and has several more China-backed projects under development, as the government aims to regulate the trade and maximize revenue.
Global Interest and Future Prospects
Low-grade material from Africa comprised over a quarter of China’s lithium imports on a metal-contained basis during the first half of this year, Matthews noted. Western companies are also eyeing African lithium. Sydney-registered Atlantic Lithium Ltd. is building Ghana’s first lithium mine, supplying concentrate to the US, benefiting from tax credits introduced by President Joe Biden. London-listed Andrada Mining Ltd. and Canada’s Tantalex Lithium Resources Corp. are developing projects in Namibia and the Democratic Republic of Congo.
British businessman Algy Cluff and Australian entrepreneur Hugh Morgan are also aiming to produce significant lithium volumes in Zimbabwe and Nigeria.
While Australia, Chile, and China are expected to make up about 70% of total supply this year, African mines will help reduce their share to just over half by the decade’s end, according to Benchmark’s Cook. The continent’s rising prominence “represents a wider trend in the diversification of where lithium is being produced,” she said.
With contributions from Annie Lee and Nduka Orjinmo.
