Huayou Cobalt, which has recently invested in Zimbabwe’s Arcadia lithium mine, must produce battery-grade lithium within five years, the country’s competition regulator says.
Huayou, one of the world’s biggest producers of battery minerals, is investing US$300 million to build a new processing plant at Arcadia, after buying the operation for US$422 million from Prospect Resources in December.
Arcadia expects to deliver its first batch of lithium-bearing minerals spodumene and petalite in 2023. But Huayou says making battery-grade lithium locally makes no economic sense.
The Competition and Tariff Commission (CTC) approved the Prospect takeover, saying it saw no monopoly risk locally; there is no local market for lithium concentrates and all output will be exported.
“Given the analysis above, the transaction was approved subject to the condition that: i) the merged entity, its subsidiaries, affiliates and successors in title should undertake to produce battery grade lithium in Zimbabwe within five years of receiving this determination; and ii) the merged entity submits to the Commission its plan to implement the condition above,” CTC says.
Despite growing international interest in its lithium, Zimbabwe is yet to develop a lithium policy to regulate investment into the in-demand metal. CTC’s order to Huayou may unsettle other investors. It shows the risks that lithium developers may face in the absence of an official position on production, in an economy with multiple regulators.
Critics have said miners should be forced to produce even batteries in Zimbabwe. But globally, manufacturers prefer making batteries closer to their markets, in places where all the raw materials needed are available.
While its new plant will process lithium for export, Huayou argues that a converter to produce battery-grade sulphates is not viable.
“For each tonne of battery-grade lithium carbonate production, it needs 2,800 kWh of green (renewable) power, 500-600 cubic metres of natural gas, 2.2 tonnes of concentrated sulfuric acid (98.5%), two tonnes of first-class sodium carbonate, 20kg of first-class sodium hydroxide, four tonnes of heavy calcium powder, and 1.6 tonnes of food-grade carbon dioxide,” Huayou said, responding to questions on their processing plans.
“There is a chronic shortage of these supporting and auxiliary materials in Africa, and the costs incurred by importation would be huge and unaffordable. It is worth noting that processing enterprises will be uncompetitive in a global market without cost-competitive inputs, raw materials, gas and power, and first-class sodium carbonate.”
A converter to make lithium sulphate is possible in ten years, but only if all the requirements are in place, the company says.
“This is subject to the availability of sufficient green (renewable) power, natural gas, sulphuric acid and heavy calcium powder in Zimbabwe, and subject to the economic feasibility of production of lithium sulphate under Arcadia Project,” said Huayou.
Before selling to Huayou, Prospect had explored the feasibility of converting battery-grade lithium hydroxide, and even produced samples.
Huayou is one of several Chinese and UK companies that have made a move to secure Zimbabwean lithium supplies over the past year.
Sinomine recently bought Bikita Minerals, the country’s oldest petalite mine, and plans a US$200 million plant. Speaking at a launch of Sinomine, President Emmerson Mnangagwa again voiced local ambitions for more local beneficiation.
“It is my expectation that the development of the lithium mining sector in Zimbabwe will lead to growth of value chain linkages in the manufacturing industry,” he said. – (NewZWire)