Surge in global lithium demand boon for Zim

Zimbabwe is set to benefit from the global surge in lithium demand, analysts have predicted, after a new report revealed the tripling in overall demand for the mineral critical for the manufacture of batteries for electric vehicles (EVs).

The country, believed to be hosting Africa’s largest lithium deposits, is positioning itself for an economic boom from the global drive towards battery-powered machines.

According to a report by the International Energy Agency (IEA), lithium demand surged to 56 percent in 2022 from 17 percent in 2017. Other minerals critical for clean energy also registered substantial gains, the IEA’s Critical Minerals Market Review said.

“We have seen a lot of developments in the lithium sector, particularly this year following the commissioning of three processing facilities and it is clear that the country has already positioned itself to be a lithium powerhouse at the global scale,” Gerald Chimanye, a mining analyst with a local think-tank told Business Weekly.

The Chinese have been dominating Zimbabwe’s lithium sector, with the company from the world’s largest EVs maker investing over US$1 billion in the past two years.

Last week, Zhejiang Huayou Cobalt commissioned its US$300 million lithium concentrator at the Arcadia Mine with an annual capacity of 450 000 tonnes.

In May this year, Chengxin Lithium Group commissioned a lithium concentrator at Sabi Star with a capacity of 300 000 tonnes per year. Early this week, China’s Sinomine Resource Group, said it had completed the construction of a spodumene concentrate plant at Bikita Minerals, Zimbabwe’s oldest lithium miner.

Between 2018 and the first half of 2021, Chinese firms invested US$4,3 billion to acquire lithium assets, twice the amount invested by companies from the U.S, Australia and Canada combined during the same period, according to the IEA report.

This makes Zimbabwe one of the largest recipients of Chinese investment in the lithium sector.

“Critically is the position; the deliberate policy taken by the Government to ban exports of lithium ore. We should therefore expect more investment in the processing facilities in the short to medium term,” Carlos Tadya, a Harare-based economist said.

Zimbabwe, alongside Indonesia and Namibia has introduced measures to ban the export of unprocessed mineral ore. Globally, export restrictions on critical raw materials have seen a fivefold increase since 2009, according to the IEA report.

Lithium is a critical raw material needed in the transition to a green economy. Lithium-ion batteries are used to power electric vehicles and production of solar panels.

In 2022, demand for lithium-ion batteries in the automotive sector increased by around 65 percent to reach 550 GWh, up from 330 GWh in 2021.

This stemmed primarily from the growth in electric passenger car sales, with new registrations in 2022 being 55 percent higher than the previous year. In China battery demand for vehicles grew by more than 70 percent in 2022 as electric car sales rose rapidly.

Battery demand in the United States grew by around 80 percent during the same year, despite electric car sales only increasing around 55 percent relative to 2021.

This was due to the average battery size of electric cars in the United States being 40 percent higher than the global average, mainly because of the relatively higher share of SUVs in the country compared with other major markets. However, the growing appetite for lithium-ion batteries in 2022 was not limited to EVs.

The battery energy storage market also experienced remarkable growth, with the market size nearly doubling to 80 GWh (combined for utility-scale and behind-the-meter), marking one of the largest annual increases in deployment ever witnessed in this sector.

This burgeoning demand has led automakers to follow in the footsteps of the trend pioneered by Tesla’s Powerwall and directly enter the battery energy storage market.

In 2022, General Motors and Toyota launched behind-the-meter energy storage products.
Apart from the growing sales of electric vehicle sales, the increasing battery size is also a key factor driving demand growth for batteries and in turn, for critical minerals.

“The IEA has been raising the question of how the growing consumer preference for larger cars will impact future emissions from the transport sector,” it said.

“The average battery size for passenger electric cars has been on an almost unbroken rising trend for many years in nearly every major market.”

While more EV models become available on the market, the IEA notes that there is “visible evidence that the trend of favouring large vehicles seen in conventional car markets is being replicated in the EV market as automakers seek higher profits and consumers opt for larger cars, often beyond what they need.”

If this trend persists, it will impose additional pressure on battery supply chains and further increase demand for the critical minerals required to make the batteries.

Zimbabwe has nearly all the ingredients needed for batteries manufacturing including nickel, graphite and lithium.-ebusinesseekly