The Chinese Communist Party (CCP) is stepping up its efforts to seize and control Africa’s natural resources. In particular, Chinese companies have accelerated their acquisition of lithium mines as lithium is an essential material used in the production of electric car batteries.
A news release published in China’s The Paper last May indicated BYD Company, the Chinese electric car and battery giant, had reached an agreement to acquire six lithium mines in Africa. BYD estimates the lithium from these mines should be enough to produce about 28 million electric vehicles.
China’s auto industry is targeting to produce 5 million new vehicles this year. If BYD is successful in extracting lithium from all six of its new mines, the ore should be sufficient to accommodate China’s auto production goals for several years.
Since lithium is essential for the production of electric vehicle batteries, the competition for this valuable resource has become increasingly intense. Africa’s vast and undeveloped mineral deposits have made it the principal target of auto manufacturers.
In July 2021, the British Geological Survey issued a report confirming Africa’s lithium resources were concentrated in the Republic of Congo (DRC), Zimbabwe, Mali, Namibia, and Ghana.
In the DRC, Chinese companies are currently competing with Australia’s AVZ Minerals for control of the Manono lithium project. The project is one of the largest high-grade lithium deposits in the world, containing an estimated 400 million tons of high-grade (1.65 percent) lithium oxide ore. A feasibility study estimates this project is likely to produce 700,000 tons of lithium oxide and 45,000 tons of primary lithium sulfate per year.
Joint ownership of the Manono lithium project was originally held by AVZ and Cominiere, a state-owned mining company in the DRC. In early May this year, AVZ announced that the sale of 24 percent stake in the Manono project to Suzhou Tianhua Times in China would be completed within the month. One of the shareholders of Tianhua Times is the Chinese battery giant Ningde Times.
A few days after this announcement was made, China’s state-owned Zijin Mining revealed it had acquired a 15 percent stake in the Manono lithium project as well. Part of the remaining 51 percent of AVZ’s shares is involved in a lawsuit, which may jeopardize its position as the project’s controlling shareholder. The two Chinese companies may eventually overtake AVZ’s shares.
According to The European Business Council for Africa, Chinese companies have had full access to some of Africa’s most important lithium mines over the past year.
Until 2021, the Zimbabwe Bikita mine was Africa’s one and only lithium-producing mine. On February 8 of this year, China’s Sinomine Resource Group announced it had acquired a 74 percent stake in the Bikita lithium mine for $180 million.
Last December, Chinese lithium-ion battery producer Zhejiang Huayou Cobalt acquired an 87 percent stake in the Arcadia lithium project in Zimbabwe from Australia’s Prospect Resources for $528 million. The mine is estimated to hold more than 72 million tons of lithium oxide and has the potential of being the least expensive to operate in the world.
Last November, China’s Chengxin Lithium acquired a 51 percent stake in Max Mind Investments’ Sabi Star Lithium mine in eastern Zimbabwe for $77 million. Max Mind owns 40 mining claims of rare metal ore blocks in Zimbabwe, 35 of them in the exploration and early work stage.
Currently, there are two lithium exploration projects taking place in southern Mali and Chinese companies have a share in both. In June of last year, China’s Ganfeng Lithium purchased a 50 percent stake in the Goulamina lithium project which is expected to yield 50 million tons of lithium ore. Also in 2020, China’s Sinohydro Group Limited, a state-owned hydropower company, signed a memorandum of cooperation with Mali’s Bougouni lithium project.
Africa is also rich in cobalt, which is the most expensive raw material for ternary lithium batteries. Seventy percent of the world’s cobalt is mined in the Republic of Congo. Eight of the top 14 cobalt mines in the DRC are held by Beijing. In 2016, China’s Luoyang Molybdenum acquired a 56 percent stake in the TFM cobalt mine, one of the most important mines in the DRC.
In an interview with Caixin Media on May 13 this year, Yu Miaojie, Peking University’s Party Secretary of the National Development Research Institute said despite Africa’s political instability, it is likely to be the last “Noah’s Ark” for labor-intensive industries. By investing billions in African countries, the CCP can unite them to cope with the pressure from the United States while simultaneously exploiting their resources to secretly make huge profits.
In a speech delivered this April 6 to the U.S. House Committee on Appropriations Subcommittee on Defense, General Stephen Townsend and the head of U.S. Africa Command said the CCP has invested huge sums of money to promote its Belt and Road Initiative in Africa.
He said Africa has enormous resources and “the winners and losers of the 21st-century global economy may be determined by whether these resources are available.”