Lithium, a soft silvery-white metal, is essential for lithium-ion batteries that power our everyday devices: from electric toothbrushes and mobile phones to electric vehicles and renewable energy storage systems. As a critical raw material for green technologies and energy transition, lithium’s strategic importance continues to grow.
Despite not possessing large natural lithium deposits like Chile, Argentina, Bolivia and Australia, China dominates the global lithium supply chain. China is among the top three lithium producers, alongside Australia and Chile, collectively accounting for around 90% of global production. Chinese companies control roughly 70% of lithium battery production worldwide. China maintains leadership positions across extraction, importation, refining, and consumption.
Several countries in sub-Saharan Africa possess significant lithium deposits, primarily found in hard rock pegmatites close to the surface that are extracted through open-pit mining. Zimbabwe holds Africa’s largest lithium deposits and leads the continent in production. Other countries with reserves include DR Congo, Mali, Ghana, Namibia, Côte d’Ivoire and South Africa.
Chinese companies have secured controlling stakes in key lithium projects:
In 2023, the Congolese government revoked Australia-based AVZ Minerals’ permit for the Manolo-Kitolo mine and allocated part of the site to China’s Zijin Mining. The ownership dispute, subject to a lawsuit at the International Court of Arbitration of the International Chamber of Commerce filed by AVZ Minerals, has yet to be resolved.
Non-Chinese companies (primarily Australia and UK-based) have recently acquired permits for lithium deposits across several African countries, signaling Western interest in securing lithium supplies. However, most projects have stalled due to a more than 80% price drop since late 2022 provoked by reduced demand from China and increased global lithium supply.
Recent examples include:
Even Chinese-owned operational mines have reduced output and cut their workforce in response to low prices.
In December 2022, Zimbabwe banned the export of unprocessed raw lithium to curb mining and smuggling by artisanal miners, and to increase benefits for the domestic economy and state revenues. Half a year later Namibia and Ghana followed suit.
While Prospect Lithium Zimbabwe (an arm of Zhejiang Huayou Cobalt) opened in 2023 Africa’s largest lithium processing plant with the capacity to transforms 4.5 million metric tons of hard rock lithium into concentrate, further local processing faces significant barriers. These include unreliable power supply, the need to import chemical reagents and shortage of skilled workers.
The Zimbabwean government initially mandated companies to present plans for producing battery-grade lithium locally by March 2024, but later relaxed this requirement due to falling lithium prices.
Limited regional collaboration further hampers the ability of African countries to compete with China’s integrated, large-scale lithium supply chain. Regional supply chain integration would be advantageous since different African countries possess complementary battery minerals including lithium, nickel, manganese, cobalt and graphite. While the December 2022 Memorandum of Understanding between DR Congo, Zambia and the US to develop a plant for the production of battery precursors represents a rare collaborative initiative, it has shown little tangible progress to date.
Despite current market challenges, long-term prospects remain positive. Most analysts predict lithium demand will outpace supply over the next decade. A growing electric vehicles market and battery storage systems will drive this demand. Countries pursuing net-zero emissions targets will require substantial lithium resources to move from fossil fuels to green energy.
The interest in exploration and production of lithium in Africa is likely to increase, particularly from non-Chinese companies seeking to diversify the lithium supply chain. Below are some examples of this trend: