Zimbabwe Signs MoU with China to Process Battery Metals

The Zimbabwean government has signed a memorandum of understanding (MoU) with Hong Kong’s Eagle Canyon International and Pacific Goal Investment to develop an industrial park to process battery metals such as lithium and nickel. The ambitious plan is expected to cost around $2.8 billion. The complex would be home to lithium-salt and nickel-sulphate plants, a nickel-chromium alloy smelter, solar and energy storage plants, as well as two thermal power plants of 300MW each.

Zimbabwe’s lithium has attracted interest form numerous parties over the recent years from large Chinese firms such as Huayou Cobalt and Chengxin, from a flurry of UK explorers, staking claims in deals worth over $700 million combined.

To produce lithium carbonate, lithium hydroxide and nickel sulphate at the scale the project promises, massive amounts of power would be needed. The Chinese companies plan to build two 300MW thermal power plants. The first, for $250 million, would be commissioned in 2024. A coking plant with a production capacity of 1.2 million tonnes per year would also be built.

Each of the two 300MW thermal plants would need 1.5 million tonnes of coal per year. Part of this would have to be imported, as domestic producers will not be able to immediately meet demand. Some of the needed 1.8 million tonnes of coking coal – used in blast furnaces to make steel – would also have to be imported.

The problem is, as part of a global energy transition effort, coal is no longer funded. The project does not reveal how it would raise funds for the thermal plants. Last year, a 1800MW thermal power plant in Zimbabwe was put on hold after potential Chinese funders walked away.

Moreover, battery producers use renewable energy for the convertors that make their battery-grade lithium. For each tonne of battery-grade lithium, 2800kWh of renewable energy is needed.

The project will not produce its own minerals. The plan is to bring lithium concentrates from Prospect Resources, Bikita and Chengxin’s Sabi Mine. It would then turn this into battery-grade lithium.

“By the end of 2025, we will commission a lithium-salt plant that has an annual output of 100,000 tons of lithium salt, with lithium hydroxide and lithium carbonate accounting for 50% each, and a total output value of nearly US$8 billion” the project plan says.

But the project’s estimates would suggest an unlikely scenario; that it will take in all the lithium concentrate produced by Sabi, Prospect Resources and Bikita Minerals. The project aims to buy 300,000 tonnes from Sabi, an estimate that matches what the mine has said it would produce per year. The new project is also proposing to take in 800,000 tonnes of lithium concentrate from Prospect and Bikita, which is also just about all the concentrate the two mines combined plan to produce.

The energy park also say they will bring in 300 000 tonnes of graphite from Karoi, three million tonnes of nickel from Guruve and Chrome from the Great Dyke. There is no detail on these assets, and how, if the resources are there, they could be brought to production within the stated tight timelines.

The project has an ambitious target: By 2025, the lithium-salt plant would be giving out value of nearly US$8 billion; a nickel sulphate processing plant with an annual output of 300,000 tons and a total output value of nearly US$2 billion; and a nickel-chromium alloy smelter with an annual output value of about US$1.8 billion US dollars. The total comes to almost $12 billion.

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