Is the U.S. falling behind China in Africa’s lithium industry?

In Technology

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The demand for lithium is rising as it has become a critical component needed in electric vehicle batteries. In 2021, the world produced 540 thousand metric tons of lithium and by 2030 the World Economic Forum projects the global demand will reach over 3 million metric tons.

Reserves of lithium have been discovered throughout the entire African continent with Zimbabwe, Namibia, Ghana, the Democratic Republic of the Congo and Mali all having notable supplies. The price of lithium has skyrocketed. In May 2022, the price was seven times higher than it was at the start of 2021. Mineral-rich nations like Zimbabwe are taking note.

Zimbabwe has been mining lithium for 60 years and the government estimates that its Chinese-owned Bikita Minerals Mine, which is located 300 kilometers south of the capital Harare, has about 11 million metric tons of lithium resources. The country is the sixth largest producer of lithium, and the International Trade Administration projects that once it fully exploits its known resources it could potentially meet 20% of the world’s demand.

“We’ve seen a lot of investments within the mining sector over the past few years,” said Prosper Chitambara, a development economist for the Labor and Economic Development Research Institute of Zimbabwe. “For us to realize the full potential from the mining sector, it means we have to move up the value chain.”

In December 2022, Zimbabwe passed the Base Mineral Export Control Act that banned the export of raw lithium. However, companies that are in the process of developing mines or processing plants in Zimbabwe are exempt from this ban. That includes Chinese firms Zhejiang Huayou Cobalt, Sinomine Resource Group and Chengxin Lithium Group which have invested $678 million into lithium projects in Zimbabwe.

“Any government in the world is bound to react when your resources are just flying in all directions,” said Farai Maguwu, director of Zimbabwe’s Center for Natural Resource Governance. “However, the lithium concentrate is still being exported lawfully out of the country. I think the government simply wanted to control the lithium that was being extracted by artisanal miners, which was not being accounted for and it was being smuggled out of the country.”

Artisanal mining, or small-scale mining, is a largely informal method where individuals use basic tools to extract minerals. The Zimbabwean government estimates that artisanal mining plays a critical role in the livelihood of over 1 million Zimbabweans.

“Artisanal miners were the most affected by the ban,” said Joseph Mujere, a lecturer in Modern African History at the University of York. “They had already accumulated loads of raw lithium that they were preparing to sell,” he said.

The Center for Natural Resource Governance estimates the government has lost nearly $2 billion in minerals smuggled across the border through artisanal mining leakage.

“There are two narratives,” Maguwu said. “The political narrative that mining is the savior of the economy. Then the grassroots narrative, which says mining is undermining our livelihoods. We sit in between. We want to see mining contribute to the economy, but not at the expense of the Zimbabwean people.”

While artisanal miners were affected by the export ban, the Chinese have benefited from its exemptions. Both the Bikita mine, which is the largest lithium mine in the country, and the Arcadia Lithium mine are Chinese owned.

In 2022, Chinese mining companies Tsingshan, China Nonferrous and Huayou Cobalt invested nearly $1.5 billion in Zimbabwe and in the same year, Sinomine Resource Group announced its plans to expand its current production at the Bikita mine by investing $200 million into building a new lithium plant.

“When we invest in the Chinese and allow them to come and do what the Zimbabweans are capable of doing, we are building China, not Zimbabwe,” Maguwu said. “Zimbabweans are saying leave room for the Zimbabwean people.”

The Chinese Embassy in Zimbabwe declined to comment on this statement.

China accounts for over 70% of global EV battery production capacity, and with over 20 years of consistent commitment to African nations it has placed itself in the right position to access the resources needed to continue this trend.

“The Chinese have played for keeps,” said Mvemba Phezo Dizolele, director of the Africa Program at the Center for Strategic and International Studies. “The United States, our relationship is not always permanent. The Chinese are just consistent in that way,” he said.

In December, President Joe Biden welcomed 49 African leaders to Washington, D.C., for the country’s second U.S.-African Leaders Summit and its first since the Obama administration.

“The United States is all in on Africa’s future,” Biden remarked at the summit.

The summit was seen as an important step in trying to restore relations, which were rocky during the Trump administration. Notably missing from the event, however, was Zimbabwe President Emmerson Mnangagwa, who has been under U.S. travel sanctions since 2002. Foreign Affairs Minister Frederick Shava attended in his place.

“The fact that he came is also still a signal that the U.S. is interested in keeping the door open with Zimbabwe,” Dizolele said. 

While the U.S. has made its intentions clear when it comes to engaging in African business, the reality is China has sunk its roots in the continent. It will be tough for the U.S. to make up for the lost time. In 2009, China overtook the U.S. as Africa’s largest trading partner. The country has grown from $121 million in total traded goods with Africa in 1950 to $254 billion in 2021, compared to the U.S. which sat at $64 billion in 2021.

“America has not been consistent in the way it engages with Africa,” said Dizolele. “If you leave and come back 10 years later, that void you left will be filled by somebody else, so it’s important that we be consistent.”

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