China is looking to Africa in the lithium race

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It’s the new gold rush and China is leading the hunt as prices soar. Except it’s not gold that everyone is looking for, it’s lithium. Many say the future of electric vehicle production, and more broadly combating climate change, depends on the rare metal.

According to Bloomberg, prices for the “green metal” have risen nearly 500% over the past year.

Sung Choi, a metals analyst at BloombergNEF, told VOA, “The cost of lithium has increased because virtually all automakers have transitioned to producing electric vehicles.”

Electric car czar and Tesla CEO Elon Musk tweeted that the “insane” cost means “Tesla may have to jump straight into large-scale mining and refining.”

FILE – Tesla CEO Elon Musk speaks before the unveiling of the Model Y at Tesla’s design studio in Hawthorne, California on March 14, 2019.

That’s exactly what China has done, and its companies want to make sure they don’t run out of the metal needed to make lithium-ion batteries — 80% of which China, which has the world’s largest electric vehicle market, produces. from global.

While more than half of the world’s lithium resources are in South America and Australia, China is scouring the world for new sources of the metal, including on the Qinghai-Tibet Plateau and elsewhere, but increasingly in Africa.

“Africa has been in the spotlight lately with its abundant resources of metals,” Choi said.

Chinese conglomerate BYD, headquartered in Shenzhen, is in talks to buy six new lithium mines in unspecified African countries, Reuters reported, citing Shanghai government-backed publication The Paper. Repeated emails to the company from VOA asking for details of the deals went unanswered.

People visit a store of Chinese automaker BYD in Beijing, March 16, 2022.

People visit a store of Chinese automaker BYD in Beijing, March 16, 2022.

In the Democratic Republic of Congo, Chinese mining giant Zijin is locked in a legal battle with Australian company AVZ Minerals over control of the Manono mine – potentially the world’s largest lithium deposit – in the east of the resource-rich country.

China is also buying up mines in Zimbabwe, where there are large undeveloped deposits of the resource. According to Reuters, Zhejiang Huayou Cobalt is investing $300 million in its recently acquired Arcadia lithium mine outside of Harare in a major transaction. The money will be used to build a facility with a processing capacity of 400,000 tons of lithium concentrate per year.

Shenzhen Chengxin Lithium Group and Sinomine Resource Group are just two of the other companies to invest in lithium in Zimbabwe over the past year.

The Zimbabwean government has welcomed the investment. Spokesperson Monica Mutsvangwa told VOA via WhatsApp that the economically unstable country, which is under Western sanctions, plans to reposition itself as a key player in the “thriving lithium sector.”

“We want to fill the vacuum created by electric batteries replacing fossil-fuel engines,” she said.

In an obvious nod to the West, she added in an email to VOA, “The battery storage industry of the dawning new electric vehicle era has left you stranded… Triple digits in the mergers and acquisitions of Arcadia Lithium, Buhera Lithium Deposits and Bikita Minerals pushed you aside.”

Joe Lowry, founder of consulting firm Global Lithium, told VOA that Western lithium producers have been caught off guard by the growth of the EV industry and with it the lithium rush.

“Lithium has been a tiny niche market for 7 decades. The global lithium chemicals market did not reach $1 billion by 2015. The industry was not prepared for the electrification of transportation,” he said via email.

“You can build a giant battery factory like Tesla in a few years. It takes up to ten years to bring a fully integrated lithium chemistry project online,” he said.

Meanwhile, “Chinese producers are investing ahead of time in resources outside of China…(and) looking to Africa,” Lowry said.

The USA is also aware of the importance of Africa. General Stephen Townsend, commander of AFRICOM, told the House Appropriations Committee in April, “Africa has vast untapped energy resources…(needs) to transition to clean energy, including cellular phones, jet engines, hybrid electric vehicles and missile guidance systems.”

“The winners and losers of the 21st century global economy can be determined by whether these resources are available in an open and transparent market or are inaccessible due to predatory practices by competitors,” he added.

And while some of the key components for electric vehicles come from Africa, the market for the finished product – made overseas – is still tiny on the continent. The mines provide jobs, but critics say locals don’t see enough of the multimillion-dollar projects.

Last year, Congolese President Félix Tshisekedi said people living in areas with mines “still languished in misery” while foreign multinationals thrived. He has launched a review of his predecessor’s minerals for infrastructure contracts with Chinese mining companies.

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