Zimbabwe wants miners to produce battery-grade lithium

Africa's top lithium producer Zimbabwe in November last year gave miners the March deadline to submit plans for the local production of battery-grade lithium, used in electric vehicles and clean energy storage, as it hopes to benefit from a global shift from polluting fuels.

The Chinese miners that dominate Zimbabwe's lithium sector produce concentrates that are shipped to China for further processing.

With global supply of the metal outpacing demand from the battery market over the last year, prices have fallen by more than 80 percent. In response, many firms have started to cut jobs and curtail output.

Last month, the world's top lithium miner Albemarle (ALB.N), opens new tab announced plans to lay off workers and halt expansion. Another U.S. miner, Piedmont Lithium (PLL.O), opens new tab on Feb. 6 said it had laid off 27 percent of its workforce.

Although some lithium producers in Zimbabwe are reportedly to be struggling for viability at the current price levels, Deputy Mines Minister Polite Kambamura told Reuters the government still wanted miners to put forward firm plans for building processing capacity.

"As government, we are not going backwards on beneficiation. We would like to urge all lithium players to come forward to the ministry with their beneficiation plans," Kambamura said.

"We did not say by March they should have set up these plants, we said they should come up with plans," he added.

One of the miners, Zhejiang Huayou Cobalt (603799.SS), opens new tab, has said it would explore local production battery-grade lithium "only when the construction and economic conditions are right".

Huayou says Zimbabwe lacks resources needed to produce battery-grade lithium, including reliable renewable energy, natural gas and sulphuric acid.

Zimbabwe's hard-rock lithium reserves, some of the world's biggest, have attracted over $1 billion of investment from Chinese miners.