Driven by heavy investment by Chinese companies, raw material production from lithium mines across Africa is expected to increase more than 30-fold by 2027 compared with last year, according to S&P Global Commodity Insights. By then, Africa will account for 12% of global supply, compared with 1% in 2022.
Diversifying supply sources will boost China's efforts to consolidate its dominance in metal processing for electric vehicles, while the United States has stepped up efforts to build its own supply networks with free trade partners and Allies such as Canada and Australia.
"There is no doubt that Africa will play an important role for China," said Peng Xu, an analyst at Bloomberg New Energy Finance in Beijing. Australia is currently the largest supplier of the raw material, and its exports could be limited as domestic refineries come online.
According to BNEF, Mali, the Democratic Republic of Congo and Zimbabwe are all likely to join the ranks of lithium mining powers by 2020.
Last month, the first shipments of lithium concentrate from a project in Zimbabwe arrived at Zhejiang Huayou Cobalt Co., while Chengxin Lithium Group Co. said it began production at its Sabi Star mine in Zimbabwe.
Ganfeng Lithium Group has invested in the Goulamina mine in Mali, and a unit of Contemporary Amperex Technology has backed a project in the Democratic Republic of Congo. Sichuan Yahua Industrial Group has a stake in a project in Ethiopia.
Martin Jackson, head of battery materials at CRU Group in London, said: "Chinese investment in Africa has undoubtedly been the biggest source of funding for battery materials supply in recent years." He said investment in new regions is crucial for China's supply chain to meet the needs of its manufacturers.
Bloomberg New Energy Finance said last month that Chinese battery producers, led by Ningde Times and BYD Co., had capacity of more than 1 terawatt hour in 2022 and continue to expand.
Alice Yu, metals and mining analyst at S&P Global Commodity Insights, said the United States is also exploring options for supplying raw materials from Africa, but so far has only a few tentative plans, including preliminary cooperation agreements with the Democratic Republic of Congo and Zambia. "Africa needs more scrutiny if it wants to be a trade-friendly supplier," she said.
BNEF said in a June 30 report that it expects global lithium raw material supply to grow 35 percent this year, with about half of that coming from entirely new businesses.
The lithium resource market will remain tight this year and in 2024, but is expected to ease from 2025 onwards as more projects come online, including in Africa and Canada.
Nevertheless, African countries are likely to follow the lead of other countries and raise the value of their exports by adding processing or refining plants, thereby generating more revenue from domestic lithium supplies.
Zimbabwe and Namibia have recently taken steps to block or ban the export of lithium ore feedstock.
It has a free trade agreement with the United States and has emerged as a potential hub for battery production for electric vehicles, with advantages including proximity to Europe and an abundance of phosphate needed for lithium iron phosphate (LFP) batteries.
The Moroccan government said earlier this year that Chinese battery maker Gotion High Technology Co LTD had reached a preliminary deal to build Africa's first large-scale electric vehicle battery factory, which would have an annual capacity of 10 gigawatts and require an investment of 6 billion euros ($6.5 billion).
