Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Sinomine Resource Group Co.’s Zimbabwean unit plans to build a $500 million lithium refinery in the next 3-5 years, even as the company currently loses money due to weak metal prices.
“We have to borrow from the market and investors,” Xuedong Gong, managing director of the subsidiary, Bikita Minerals, said in an interview. “We don’t have much money.”
Sinomine is one of several Chinese mining companies that entered Zimbabwe as a spike in lithium prices during 2021 and 2022 fueled a wave of transactions, swiftly turning the nation into a significant producer of the battery metal. President Emmerson Mnangagwa’s government has urged investors to go beyond exporting lithium ore or concentrate by carrying out more processing domestically.
Although lithium spot prices have fallen almost 90% in the last two years, Chinese companies continue to look for feedstock for the rechargeable battery industry back home — betting that prices will recover when production surpluses give way to deficits.
(By Godfrey Marawanyika)
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