Bikita Minerals plans to invest up to US$500 million on a new lithium smelter, stepping up local processing despite a sharp fall in global metal prices.
But the company has a few home truths for Zimbabwe – lithium is not as rare as many here think, and the country may lose out on its lithium hopes if it does not fix costs and policy to compete with other emerging producing countries.
The mine is Zimbabwe’s oldest lithium operation. In 2022, global metals giant Sinomine bought it for US$180 million from its previous European owners. Since then, Sinomine has spent a further $200 million on two processing plants to produce lithium concentrates. Now the company plans to build a smelter, which would make more value-added products such as lithium sulphates, meeting a government demand for local processing.
“In the next three to five years, by 2028-9, we will bring another investment that will be between US$400-500m to build a lithium smelter here to bring additional lithium value and bring more technology closer to the battery industry,” Bikita MD Gong Xuedong said at the mine on Monday.
This is despite the collapse of lithium prices globally, which has forced major investors around the world to delay new projects or close others. Gong says Bikita is losing money because of the lithium price crisis.
“The lithium price is only 10% of its peak. This means that Bikita is losing money. But, as a responsible investor here, we didn’t reduce employment, we didn’t close any of our operations. However, we will watch the price developments. If the price keeps going down, we may reduce our production,” Gong said.
“But, until now, even though we have been losing money, we haven’t done that. We also have confidence to continue our investment.”
Zimbabwe takes pride in its current position as Africa’s leading lithium producer, but Bikita fears the country may lose this position to competitors.
Lithium producers in Zimbabwe do not export raw lithium, but produce concentrates. Keen to get more from lithium, government has ordered companies to go beyond producing concentrates. Lithium miners pay high taxes – Bikita says it pays 9% of the gross value of minerals before it ships any production. Gong said policy must balance this demand with the realities of the market, lest Zimbabwe lose its market share and fail to take advantage of the resource.
Lithium is not as rare in Africa as many in Zimbabwe believe, Gong says. New production is coming up around the world, including in Africa, at lower cost. He points to the new Manono project in DRC, a single mine whose capacity will equal that of all mines in Zimbabwe combined, as well as emerging projects in Mali.
“Some of my friends here think lithium is rare in the world. But supply is huge now. So, what’s Zimbabwe to do not to lose the market? I hope all of my Zimbabwe friends think about that,” Gong says.
Production costs in Zimbabwe, such as taxes and transportation, are higher than in other rising producers, he says. “We need to support each other, as company and government, otherwise I hundred percent believe that we will lose the market,” says Gong.
Bikita exports concentrates through ports in South Africa and Beira in Mozambique. However, to reach Beira, Bikita has to transport lithium via the Chivhu route, and not the shorter route via the Birchenough Bridge because of weight limits. The company plans to spend US$14 million to build a new bridge at Birchenough. – (NewZWire)
