Far from the diplomatic and technological spheres, China and the United States are engaged in a fierce battle in the world of mining resources in Africa, particularly in the exploitation of lithium. This green metal is one of the essential components in the manufacture of batteries for electric vehicles (EV), in particular lithium-ion. It stores electricity much better than any other mineral. Better still, its lightness allows manufacturers to manufacture light, compact batteries that can store a large amount of energy. It is therefore easy to understand the growing interest of these two great powers in this white gold.
In this mineral competition, Beijing took the lead very early on by multiplying large investments in several African countries for more than a decade. One of the latest operations is the agreement that Hainan Mining, a subsidiary of the Chinese conglomerate Fosun International, signed on January 19, 2023 with the British Kodal Minerals, to invest 100 million dollars in its new subsidiary Kodal Mining UK Limited. . This will allow it to hold 51% of the shares of this entity responsible for developing the Bougouni lithium mine in Mali, with a capacity of nearly 2 million tonnes over a period of 8.5 years.
Also in Mali, another Chinese company, Jiangxi Ganfeng Lithium, one of the largest lithium producers in the world, has set up a joint venture since 2021 with the Australian Firefinch, a subsidiary of Leo Lithium, to acquire a 50% stake in Mali Lithium BV, for 130 million dollars. A joint venture that will develop the Goulamina lithium project with an area of 100 km².
This lithium mine, the first in West Africa, is located about 150 km south of Bamako, with an annual capacity of 726,000 tonnes of lithium ore over 23 years. Its entry into production is scheduled for the first half of 2024. The two partners announced on April 19, 2023, the purchase of 100% of the shares of two mining concessions near Goulamina for an amount of 3.11 million dollars.
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The rich subsoil of the Democratic Republic of Congo (DRC) also arouses Chinese desires. At the end of 2020, Jiangxi Ganfeng Lithium had concluded a five-year agreement with the Australian company AVZ Minerals, to acquire nearly a third of the capital of the Manono mine, considered to be the largest lithium deposit in the world. With the key, an annual supply of 160,000 tons of lithium.
More than 1,800 km from this Central African state, in Zimbabwe, a country which is home to large untapped deposits of lithium, investors from the Middle Empire are also present. At the end of December 2021, the Zhejiang Huayou Cobalt company acquired Arcadia Lithium mine from the Australian company Prospect Resources, for an amount of 422 million dollars. This mining deposit, with a capacity of 42.3 million tons of ore reserves, is located about forty kilometers from the capital Harare. In 2021, two other Chinese companies, Shenzhen Chengxin Lithium Group and Sinomine Resource Group, had also invested in Zimbabwean lithium.
In addition to exploitation, Chinese groups are betting more and more on the transformation of lithium. In May 2022, Zhejiang Huayou announced an investment of $300 million to develop the mine and build a plant that will be able to process around 4.5 million tonnes of ore and produce 400,000 tonnes of lithium concentrate per year.
At the end of March 2023, Premier African Minerals launched its first lithium processing plant in Zimbabwe, with a capacity of nearly 50,000 tonnes of spodumene concentrate per year. By deciding to invest in the transformation of lithium, these companies wish to align themselves with the decision of the Zimbabwean State which has banned the export of raw lithium since December 2022.
Morocco’s lithium deposits also attract the Chinese. On April 5, 2023, the Korean group LG Energy Solutions (LGES), the world’s second largest producer of electric batteries, initialed an agreement with the Chinese Yahua Industrial Group for the production of lithium hydroxide in the Kingdom. Objective: to strengthen its lithium supply chain, particularly to the United States.
Read also: Batteries for electric vehicles: Korean LG will produce lithium in Morocco
If China is multiplying partnerships and takeover operations in Africa, it is to secure its supplies and consolidate its position as the world’s leading producer of lithium batteries with nearly 75% of world production. According to Bloombergwhich quotes a note from the bank UBS AG, by 2025, mines controlled by Chinese interests should produce up to 705,000 tons of lithium, compared to 194,000 tons in 2022. This will increase Beijing’s share in the global supply of 32% in 2025 against 24% in 2022. An increase supported by its many mines in Africa.
The American Offensive
This Chinese omnipresence on the lithium market hardly enchants the American rival. To counter this rise in power by Beijing, Washington has implemented an offensive strategy centered on cleaner extraction that is more respectful of human rights. A barely veiled criticism of China, regularly accused of practices of exploitation of workers. An intense diplomacy whose premises appeared during the magisterium of former President Donald Trump, who aimed to develop a bold policy to control lithium reserves in the world.
At the end of September 2022, the United States organized a ministerial meeting in New York, as part of the Partnership for the Security of Mineral Resources, initiated in collaboration with Japan and the European Union. African mining countries, namely the DRC, Mozambique, Namibia, Zambia and Tanzania, were invited.
Three months later, on December 13, during the USA-Africa Summit, Washington signed a memorandum of understanding with the DRC and Zambia to develop, in these two countries, a complete value chain around batteries for electric vehicles, the extraction of minerals to industrial manufacturing.
Read also: DRC: creation of a research center on electric batteries, before a factory
At the same time, senior American officials such as Vice President Kamala Harris, Treasury Secretary Janet Yellen, United States Ambassador to the United Nations Linda Thomas-Greenfield, Secretary of State Anthony Blinken, as well as the first lady Jill Biden, have stayed in several African countries such as Ghana, Zambia, Tanzania. That is five official visits between December 2022 and April 2023. Stays during which economic issues were at the center of discussions.
The EU also in the race…
The European Union, overtaken by the two behemoths in the mining field, is also eyeing Africa. During the Kinshasa Economic Forum in March 2023, the EU announced negotiations with the DRC to help it set up a regional hub for the production of electric batteries. A way to allow its member countries to secure their supplies for electric cars, after the European Parliament voted, in June 2022, the end of sales of new thermal cars in the EU from 2035.
The EU also wishes to encourage European manufacturers to establish themselves in this country, with advantageous production costs. BloombergNEF confirms this moreover in its study on the cost of producing electric batteries in the DRC, published in November 2021. According to the American research center, building a factory of 10,000 tonnes of materials for electric batteries would cost around three times less than in China and about half the price of Poland, an EU member country.
Kwasi Ampolo, lead author of the report explains that “the raw materials for batteries are, in most cases, imported into China from Africa and refined before being exported to Europe”. Thus, through the DRC, “European car manufacturers can reduce their (greenhouse gas) emissions by shortening the transport distance, taking advantage of the DRC’s hydroelectric network and the proximity of raw materials”.
If these three giants focus on the exploitation and production of the minerals used in the manufacture of electric batteries, in particular lithium, it is because they are aware of the growing demand for this metal at the global level. This high consumption should have an impact on the prices of this white gold. Already in 2021, costs had increased by almost 500%. According to the International Energy Agency, manufacturers of clean-energy technologies will need 40 times more lithium in 2040 than in 2020.
Source: Cleantechnica.
Source: Cleantechnica.
The electric vehicle sector also runs at high speed. According to the specialized site Cleantechnicamore than 6.3 million EVs were sold worldwide between January and November 2022, compared to more than 4.6 million in 2021. A market logically dominated by the American Tesla (18.1%) of Elon Musk and Chinese automakers BYD (12.7%) and SAIC Motor (9.6%).
But in this electric race, Beijing has taken a significant lead over its two competitors. “China had free rein for 15 years, while the rest of the world slept,” said Brian Menell, CEO of mining company TechMet, in an article published on February 28, 2023., by the British weekly The Economist.
Until now spectators of this Sino-American rivalry on their land, countries like the DRC and Zambia have decided to emerge from their passivity by investing in the production of electric batteries. The two countries signed an agreement at the end of March 2023 to carry out a feasibility study for the establishment of an electric battery industry for electric vehicles.
This future factory will be built in the province of Haut-Katanga in the DRC, a special economic zone bordering Zambia. May other mining countries like Mali, Zimbabwe, or even Tanzania, be inspired by it.
