An African country is poor but has a mineral more precious than diamonds, causing both the US and China to race for cooperation.

Africa is home to 30% of the world’s mineral reserves, 40% of gold and at least 90% of the world’s chromium reserves. In addition, nature favorably endowed this continent with countless other precious minerals such as cobalt, platinum, uranium, diamonds and especially lithium.

Automakers are turning to electric vehicles one after another, causing demand for lithium and other minerals to skyrocket. In 2021, the world has mined 540,000 tons of lithium meters. It is expected that the demand for lithium will reach 1.5 million tons by 2025.

Zimbabwe, the country of 60 minerals

Abundant lithium reserves are scattered throughout Africa, typically in Zimbabwe, Namibia, Ghana, the Republic of Congo and Mali. Zimbabwe is a country that has been mining lithium for 60 years. In 2020, Zimbabwe is the 6th largest lithium producer in the world. The country possesses more than 60 minerals, including a set of five that are crucial to electric vehicle batteries: lithium, cobalt, manganese, nickel and graphite. Minerals play a vital role in Zimbabwe’s economic growth, accounting for 60% of exports, while the mining industry contributes 11% to GDP.

However, the economic landscape in Zimbabwe is not very attractive to investors. Zimbabwe currently has the highest inflation rate in the world, peaking at 283% in 2022 and lending rates as high as 45%. However, in May 2022, when the price of lithium has increased 7 times compared to the beginning of 2021, Zimbabwe sees this as an opportunity to move up the value chain and become a supplier for 20% of lithium demand. Global.

Lithium is so abundant here that it even occurs in the soil near the surface in many parts of the country. Villagers in these places even mined their own lithium to sell to merchants to improve their lives. This method of spontaneous mining with rudimentary tools and machines, although helping to feed more than 1 million people, caused the country to lose $2 billion of minerals because of illegal cross-border trade.

In December 2022, Zimbabwe passed the Raw Minerals Export Control Act, which banned the export of crude lithium. However, companies that build mines and export processing plants in Zimbabwe are exempt from the law. Including Chinese companies such as Huayou Cobalt, Sinomine Resource Group and Chengxin Lithium Group. It is known that they have invested 678 million USD in lithium projects.

The act hit the spontaneous miners the hardest, as they had previously stored large quantities of crude lithium but had not yet sold it. In fact, the law is mainly intended to prevent illegal mineral trade, not to make it difficult for those who want to do business, especially if the business is beneficial to the country.

Not giving in to China, the US tries to resume relations with Zimbabwe

In 2009, China overtook the US to become Africa’s largest trading partner. This is a convenient step for Chinese enterprises to access abundant lithium sources.

In Zimbabwe, there are more than 80 Chinese state-owned companies. Between 2005 and 2020, Chinese merchants have invested about $10.4 billion in China, while also buying Australian and American companies. Companies such as Huayou Cobalt and Sinomine Resource Group own the most important and abundant lithium mines in Zimbabwe, such as the Bikita mine, 300 kilometers south of the capital Harare, containing 11 million tonnes of lithium.

In December 2022, US President Joe Biden hosted 49 African leaders in Washington DC during the US-Africa Leaders Summit. It took eight years to have this conference, so it is an important step to re-establish relations between the two sides. Earlier, the African Union and the South African Development Community asked the US side to lift economic sanctions against Zimbabwe.

Resources are not of the East, nor of the West

Zimbabweans can afford to realize that, by allowing so many Chinese or American investors in, they are enriching for outsiders, rather than for their home country. After all, the resources belong to them, neither the West nor the East. The country’s leaders are looking for ways to unleash the country’s potential, including the idea of ​​creating an OPEC-like cartel. This will be where mineral-rich countries come together to control the global lithium market and price.

Reference from: CNBC