Sinomine (703233) decries the challenging conditions in Zimbabwe’s lithium sector. Poor infrastructure and inconsistent policies exacerbate the effects of falling lithium prices, according to the China-based company’s Zimbabwean unit.

Sinomine Faces Challenges in Zimbabwe’s Lithium Market

Zimbabwe, a leading lithium producer in Africa, has attracted over $1 billion in investments from Sinomine and other Chinese companies like Zhejiang Huayou Cobalt and Chengxin Lithium Group since 2021. Despite this, the lithium price decline since its 2022 peak, driven by an oversupply and weaker demand for electric vehicle batteries, poses difficulties for operators.

Bikita Minerals Highlights Zimbabwean Obstacles

Bikita Minerals, a unit of Sinomine, revealed that the lithium market downturn pressures companies to reduce production and lay off workers. Power supply unreliability, funding limitations, and foreign currency shortages complicate operations further.

Policy Inconsistencies and Infrastructure Limitations

The company outlined regulatory inconsistencies in licensing, taxation, and exports, coupled with foreign currency rules pushing exporters to convert 25% of their earnings to a weakening local currency, leading to significant value loss.

Possible Government Interventions

Inadequate infrastructure in lithium-rich areas notably affects exploration and production costs. Bikita Minerals advocates for government measures like tax breaks and reduced royalties to support the industry.

Despite plummeting lithium prices, there is governmental pressure on miners to establish local refineries. Sinomine, with a $300 million investment in Bikita Minerals, plans to spend $500 million on a lithium smelter within the next five years.

Disclaimer:
The content presented on this page has not been manually verified by our team. While we strive to ensure accuracy, we cannot guarantee the validity, completeness, or timeliness of the information provided. Always consult with appropriate professionals or sources before making any decisions based on this content.

Click here for more Company News