Huayou Cobalt bets on Arcadia Lithium Mine

Chinese battery manufacturing giant Huayou Cobalt is intensifying its focus on Zimbabwe's Arcadia Lithium Mine, as it pushes forward with a lithium sulfate project aimed at significantly reducing production costs and deepening integration across its supply chain.

The Arcadia Lithium Mine, located near Harare, was acquired by Huayou in 2022 from Australian miner Prospect Resources Ltd for US$378 million. Since then, Huayou has elevated the mine to a strategic position within its global operations, underscoring its role in securing long-term lithium supplies for the electric vehicle (EV) battery industry.

In its recently released 2024 Annual Report, Huayou revealed that construction of a 50,000-tonne lithium sulfate processing facility began in January this year. The plant is expected to integrate the mining and metallurgical processes, thereby transitioning the operation from mere concentrate production to refined lithium salt output.

"The construction of the 50,000 tonnes lithium sulfate project began in January 2024," the company stated. "After the completion of the project, the integration of mining and metallurgy from lithium concentrate to lithium salt will be achieved, greatly reducing the production cost of lithium salt."

Arcadia is one of the largest hard rock lithium resources globally and a cornerstone of Zimbabwe's ambitions to become a major player in the global lithium supply chain. In 2023, the mine shipped 400,000 tonnes of lithium concentrate — a 41% year-on-year increase in production — with total output reaching around 500,000 tonnes.

Huayou reported that the mine has an estimated resource of 58.29 million tonnes, with an annual output capacity of 4.5 million tonnes. The operation's remaining exploitable lifespan stands at just over nine years, and its book value was reported at US$3.4 million at the close of the financial year.

The project forms part of China's broader strategic ambition under the 14th Five-Year Plan to secure raw materials for its fast-growing new energy sector.

"In Africa, the lithium sulfate project in Zimbabwe will be implemented as planned," Huayou reiterated, noting the site's role in complementing its cobalt-copper mining operations in the Democratic Republic of Congo.

Lithium, especially in its processed forms such as lithium sulfate, is a critical ingredient in manufacturing batteries for electric vehicles and energy storage systems — sectors seeing rapid growth worldwide. Huayou's investments aim to support this global demand by expanding its footprint across key jurisdictions including Zimbabwe, Indonesia, South Korea, and Hungary.

"The new energy vehicle industry has a highly globalised characteristic," Huayou said. "The company, based on the characteristics of the industry, arranged its business operation internationally and invested in mineral resource development, smelting and processing, battery material manufacturing and other projects."

However, Huayou cautioned that operations in countries like Zimbabwe are not without risk. The company cited potential challenges stemming from political, legal, regulatory, and economic uncertainties that could impact its investment outcomes.

"If the company is unable to effectively respond to and resolve the said risks in the future, it may lead to the risk of litigation and development not meeting expectations," the report warned.

Still, with Arcadia at the centre of its lithium strategy, Huayou's deepening commitment signals confidence in Zimbabwe's mineral potential and the viability of the country as a base for long-term resource development and downstream processing.