JOHANNESBURG (Reuters) - Huayou Cobalt on Thursday said it could not immediately commit to producing battery-grade lithium in Zimbabwe after the country’s competition authority made that a condition of its takeover of a lithium mine.
China’s biggest cobalt refiner acquired the hard-rock Arcadia lithium mine, just outside the capital Harare, for $422 million earlier this year and has announced plans to invest $300 million in its development.
But Zimbabwe’s Competition and Tariff Commission said in a June 22 notice that the deal was approved subject to Huayou undertaking to produce battery-grade lithium in Zimbabwe within five years.
Huayou said battery-grade lithium production is not part of the project agreement, but it has had discussions with the competition authority and agreed to explore local production of lithium sulphate “only when the construction and economic conditions are right”.
Huayou’s stated plans are to build a concentrator plant to process ore, not a converter to produce battery-grade lithium.
In a statement to Reuters, Huayou said it is committed to exploring “development of infrastructure that would allow refining to happen close to production”, but it cannot do this “without support from local partners and without the right conditions”.
Nations across Africa are anxious to curb exports of unrefined minerals and move up the value chain by developing domestic processing, particularly as demand for batteries used in electric vehicles surges. But unreliable electricity and a lack of other inputs pose obstacles.
Huayou in May said there was a chronic shortage of the materials needed to produce battery-grade lithium in Africa, and importing these materials would be unaffordable.
Huayou expects Arcadia to start producing by 2023.
Reporting by Helen Reid; editing by Barbara Lewis
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