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.
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.
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.
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.
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.”