Zimbabwe believes that lithium prices will support a $270 million deal with China

The CEO of Zimbabwe’s state-owned Kuvimba Mining House stated on Monday that the company is sticking with its $270 million lithium project on the assumption that lithium prices would rise and hopes to finalize a contract with two Chinese businesses this month.

Lithium prices are expected to stabilize this year due to the mothballing of certain mines and strong sales of electric vehicles (EV) in China, according to analysts. Due to oversupply and slower-than-anticipated growth in EV sales, they have dropped by more than 80% from their high in November 2022.

According to CEO Trevor Barnard, Kuvimba anticipates a stronger price recovery in the upcoming year, albeit it is doubtful that prices will hit the 2022 record highs.

“That was obviously a bubble driven by huge demand forecasts and huge positive sentiment around lithium,” he added in reference to the pricing in 2022.

According to business documents, since 2021, Zimbabwe, Africa’s largest supplier of lithium, has seen over $1 billion invested in lithium projects, primarily from Chinese battery metal firms.

Barnard stated that he anticipated the Chinese investors to complete their agreement with Kuvimba to construct a lithium concentrator at Sandawana mine that would produce 600,000 metric tons of lithium year, without identifying them.

“We did a review of the Sandawana project, and we found that it is still a very good project to proceed with because of the quality of the resource and the size of the resource as well,” Barnard stated.

As the Asian nation looks to solidify its place in the global battery metal value chain, several Chinese companies have purchased lithium assets in Zimbabwe, including Zhejiang Huayou Cobalt (603799.SS), Sinomine Resource Group (002738.SZ), Chengxin Lithium Group (002240.SZ), Yahua Group (002497.SZ), and Canmax (300390.SZ), opens new tab.