Published on 29 Mar 2023

Huayou Cobalt powers up lithium concentrate production in Zimbabwe

Chinese firm aims to process 4.5 million tonnes of raw lithium ore annually

Zhejiang Huayou Cobalt, a Chinese company that produces materials for new energy batteries, has started with trial production of lithium concentrates at its Arcadia mine in Zimbabwe. The project is Huayou's largest investment in Africa to date. According to a company statement, the Arcadia project is an important strategic move aimed at building an integrated industrial chain for Lithium-ion battery materials. The project's success is vital in ensuring Huayou's future lithium supply.

In April 2022, Huayou purchased the Arcadia lithium project from Australia's Prospect Resources and other minority investors for US$422m. At the time of the acquisition, it was announced that Huayou plans to construct a processing plant capable of treating around 4.5 million tonnes of ore and producing 400,000 tonnes of lithium concentrate annually. Huayou recently completed the installation and commissioning of all production lines at the Arcadia project.

Lithium concentrates are processed intermediate products obtained from lithium-bearing ores. With a higher lithium content than raw ores, they are ideal for further processing and refinement. Typically, these concentrates serve as the starting material for lithium chemical production, which is used in applications like Lithium-ion batteries. Huayou has agreements with several international car companies – including Tesla, Volkswagen and Ford – in relation to the supply of materials to manufacture electric vehicle batteries.

Zimbabwe's abundant lithium reserves have attracted significant foreign investment, particularly from Chinese companies. In September 2022, the Zimbabwean government inked a US$2.8bn agreement with Hong Kong Eagle International Investment Holding and Pacific Goal Investment to build a battery metals processing facility near Harare. The project, expected to be completed by the end of 2025, will process metals used in the Lithium-ion battery value chain and include a lithium-salt plant, a nickel-sulphate plant and a nickel-chromium alloy smelter. According to President Emmerson Mnangagwa, this venture will establish Zimbabwe as a major producer of Lithium-ion batteries. Meanwhile, Chengxin Lithium Group acquired a controlling interest in the Sabi Star lithium project for US$76.5m in November 2021, and Sinomine Resource Group purchased the Bikita Minerals lithium mine for US$180m in 2022, with plans to invest an additional US$200m in plant construction and mining operations expansion. Zimbabwe implemented a ban on the export of raw lithium ore in December to promote domestic processing of the metal.

In addition to its operations in Zimbabwe, Huayou operates two copper and cobalt projects in the Democratic Republic of Congo, with an annual production capacity of 100,000 metric tonnes of cathode copper and 10,000 metric tonnes of cobalt. Recently, Huayou also entered into a strategic investment agreement with Australia-based Akari Metals, providing a funding boost of A$2.5m (US$1.7m) to accelerate the exploration activities related to the Uis lithium project in Namibia.

References

‘Chengxin Lithium drops after battery materials supplier plans to buy stake in mostly unexplored mining project’, Yicai Global, 04 November 2021

‘Binding agreements executed for sale of Arcadia Lithium Project to Zhejiang Huayou Cobalt’, Prospect Resources, 23 December 2021

‘Zimbabwe deals help China tighten African lithium grip’, African Business, 09 March 2022

‘Volkswagen unveils Asian ventures to secure e-battery materials supply’, Reuters, 21 March 2022

‘Completion of sale of Arcadia Project’, Prospect Resources, 20 April 2022

‘What’s fuelling China’s lithium rush in Zimbabwe? The long game on zero carbon’, South China Morning Post, 13 June 2022

‘China's Sinomine invests $200 mln in Zimbabwe lithium project’, Reuters, 17 June 2022

‘China beats competition to secure Zimbabwe lithium source’, Deutsche Welle, 11 July 2022

‘Tesla signs battery-material deals in China. The stock is rising’, Barron's, 01 August 2022

‘Chinese investors plan $2.83 billion metals park in Zimbabwe’, Bloomberg, 16 September 2022

‘US$13bn mining deal sealed’, The Herald, 17 September 2022