China tightens grip on Zimbabwe lithium

Chinese investors now control more than 80% of Zimbabwe's lithium production, cementing Beijing's dominance over one of the country's most strategic mineral sectors even as a global price slump exposed the industry's vulnerability and led to significant job losses.

According to Lithium Producers Association of Zimbabwe chairman Innocent Rukweza, Chinese-owned and Chinese-backed companies now account for the overwhelming majority of operational lithium projects in the country.

"More than 80% of production is coming from Chinese-owned or Chinese-partnered projects," Rukweza said in a recent interview.

"In fact, of all operational projects, they are effectively running production."

The dominance of Chinese firms spans mining, processing and export channels, reflecting China's broader global strategy of securing supplies of critical minerals such as lithium and cobalt, which are essential for the manufacture of electric vehicle batteries and energy storage technologies.

Zimbabwe's lithium sector has been recovering from a severe downturn after global lithium prices tumbled from record highs during the electric vehicle boom. The price collapse resulted in companies scaling back operations, delaying expansion plans and shedding jobs.

Rukweza said the industry lost more than 1,000 direct jobs during the downturn.

"When prices went down, we lost more than 1,000 direct jobs," he said.

"Companies had to lay off workers and some projects were delayed because of viability concerns."

Despite the setback, the industry is forecasting a strong recovery, underpinned by substantial investment and expanding processing capacity.

Approximately US$2 billion has already been invested in Zimbabwe's lithium sector, while projects worth a further US$1.5 billion are under development.

Export earnings are projected to double to about US$1 billion this year from roughly US$500 million last year as beneficiation projects begin to add value to locally mined lithium.

Zimbabwe banned the export of raw lithium ore in 2022 in an effort to encourage local processing and increase export revenues.

According to Rukweza, the policy has significantly improved the sector's earnings.

"From about US$60 million in raw exports, we moved to more than US$500 million annually, and we are now targeting US$1 billion," he said.

A major focus of the industry's next phase is the production of lithium sulphate, an intermediate product used in battery manufacturing that commands higher value than raw ore.

One lithium sulphate plant has already begun production, with the industry targeting annual output of about 50,000 tonnes as capacity expands.

At least six beneficiation projects, including concentrators and lithium sulphate plants, are currently under construction and are expected to become operational from 2027.

However, despite Zimbabwe's push to move further up the value chain, ownership of most operational assets remains concentrated in Chinese hands.

Rukweza said Chinese companies dominate both wholly owned mines and joint ventures, giving them significant influence across the entire lithium supply chain.

"It is very much a Chinese phenomenon," he said.

"They went through the whole supply chain."

While new players such as Ghana-based Bravura and the state-linked Sandawana lithium project are entering the market, they remain relatively small compared to the established Chinese operators.

The concentration of ownership has raised questions about how much long-term strategic control Zimbabwe will retain over a mineral expected to remain one of its leading export earners as global demand for electric vehicles and renewable energy storage continues to grow.

Rukweza cautioned that the sector remains highly exposed to international price movements, noting that most operations become economically challenging when lithium carbonate prices fall below between US$17,000 and US$18,000 per tonne.

"Below that level, it becomes very difficult to operate," he said.