June 04, 2022 8:27 AM
JOHANNESBURG, SOUTH AFRICA —
It is the new gold rush, and China is leading the hunt as prices surge. Only it’s not gold everyone’s looking for, it’s lithium. Many say the future of electric vehicle production and, more broadly, combatting climate change, depend on the rare metal.
Prices for the “green metal” have seen an almost 500% increase in the past year, according to Bloomberg.
Sung Choi, a metals analyst at BloombergNEF, told VOA, “The cost of lithium has risen because virtually all automakers have jumped onto producing electric vehicles.”
Electric car tsar and Tesla CEO Elon Musk tweeted that the “insane” costs meant “Tesla might actually have to get into the mining & refining directly at scale.”
That is exactly what China has been doing, and its companies are looking to make sure they don’t run out of the metal needed to make lithium-ion batteries – which China, which has the largest EV market in the world, produces 80% of globally.
While more than half of global lithium resources are in South America and Australia, China is scouring the world for new sources of the metal, including in the Qinghai-Tibetan plateau and elsewhere, but increasingly in Africa.
“Africa has recently been in the spotlight with its ample resources in metals,” Choi said.
Shenzen-headquartered Chinese conglomerate BYD is in talks to buy six new lithium mines in unspecified African countries, Reuters reported, citing Shanghai government supported publication The Paper. Repeated emails to the company from VOA requesting details of the deals went unanswered.
In the Democratic Republic of Congo, Chinese mining giant Zijin is in a legal battle with Australia’s AVZ minerals over control of the Manono mine – possibly the world’s biggest lithium deposit — in the resource-rich country’s east.
In Zimbabwe, too, home to large untapped deposits of the resource, China is buying up mines. In a major deal, Zhejiang Huayou Cobalt is investing $300 million in its recently purchased Arcadia Lithium mine outside Harare, according to Reuters. The money will be used to construct a plant with a processing capacity of 400,000 metric tons of lithium concentrate a year.
Shenzhen Chengxin Lithium Group and Sinomine Resource Group are just two of the other companies that have invested in lithium in Zimbabwe in the past year.
The Zimbabwean government has welcomed the investment. Spokeswoman Monica Mutsvangwa told VOA via WhatsApp that the economically unstable country, which is under Western sanctions, plans to rebrand itself as a major player in “the blooming lithium sector.”
“We aim to fill the vacuum being created by the displacement of fossil fuel engines by electric batteries,” she said.
In an apparent reference to the West, she added in an email to VOA, “The battery storage industry of the ushering New Electric Vehicle Era has shunted you by the wayside … Triple digit figures in the mergers and acquisition of Arcadia Lithium, Buhera Lithium deposits and Bikita Minerals have shunted you aside.”
Joe Lowry, founder of advisory firm Global Lithium, told VOA that Western lithium producers had been taken by surprise regarding the growth of the EV industry and therefore the rush for lithium.
“Lithium has been a tiny niche market for 7 decades. The global market for lithium chemicals didn’t reach a billion dollars until 2015. The industry was not prepared for electrification of transportation,” he said by email.
“You can build a huge battery factory like Tesla does in a couple years. It takes up to ten years to bring a fully integrated lithium chemicals project online,” he said.
Meanwhile, “Chinese producers invested ahead of the curve in resources outside China … (and) are looking at Africa,” Lowry said.
The U.S., too, knows the importance of Africa. General Stephen Townsend, AFRICOM commander, told the House Appropriations Committee in April, “Africa possesses vast untapped energy deposits … (needed to) transition to clean energy, including mobile phones, jet engines, electric hybrid vehicles and missile guidance systems.”
“The winners and losers of the 21st century global economy may be determined by whether these resources are available in an open and transparent marketplace or are inaccessible due to predatory practices of competitors,” he added.
And while some of the key components for EVs come from Africa, the market for the finished product – made overseas – is still minuscule on the continent. The mines provide jobs, but critics say locals don’t see enough trickle-down from the multimillion-dollar projects.
Last year, Congolese President Félix Tshisekedi said that people living in areas with mines were “still languishing in misery,” while foreign multinationals prospered. He has launched a review of his predecessor’s “minerals-for-infrastructure” contracts with Chinese mining companies.