Zhejiang Huayou Cobalt invests US$300M to construct a lithium mineral concentrator in Zimbabwe after the country bans the export of lithium ores. 

China-based Zhejiang Huayou Cobalt (“Huayou”) has announced it has commissioned a lithium processing facility in Zimbabwe, with the aim of producing up to 450kt of lithium mineral concentrate for export to China. Huayou has invested US$300M in developing the lithium mineral concentrator which will be located in Goromonzi, east of Harare. Huayou had previously brought the Arcadia lithium mine, also in Zimbabwe, from Prospect Resources for US$422.0M in December 2021. Therefore, the Goromonzi lithium plant represents the latest in Huayou’s moves into the lithium sector.

In December 2022, the Zimbabwean government banned the export of lithium-bearing ores. The government claimed that the country was losing EUR1.7Bn (US$1.8Bn) in value from these exports and that banning them would also reduce the amount of artisanal-mined lithium from the country. The government hoped that by implementing this ban, it would be able to retain greater value from the lithium supply chain as companies would be forced to develop downstream processing capacity.

A similar move had been implemented in Indonesia, as the government banned the export of nickel ore in an attempt to develop its own downstream nickel processing sector. This move, while controversial in some sectors, has been largely successful, as the growth in newly built Indonesian downstream nickel processing capacity over the last decade shows.

It remains to be seen if this move by Zimbabwe will have the same effect. The government is banking on predicted high lithium demand, spurred on by aggressive electric vehicle targets, materialising over the coming decades.