Booming lithium supply from Africa is keeping a lid on the battery commodity’s price despite resurgent Chinese demand.
Global investment bank Citi estimates production from China’s top five manufacturers of rechargeable batteries is currently rising nearly 10 per cent month-on-month and more than 50 per cent year-on-year.
“However, the supply response is outpacing demand growth in the near-term, resulting in inventory starting to rise,” Citi told clients last week.
“Our dataset indicates that lithium production volume might be up 25 per cent month-on-month in March 25.
“We maintain our view that lithium prices could see some pressure in the near-term unless we see some supply discipline, self-imposed or government-required, in the space.”
The prevailing price of the spodumene concentrate Western Australia’s miners sell is currently about $US840 per tonne, rising 3 per cent so far this year but still far below the lofty heights of 2023 when it almost touched $US8000/t. Most lithium mines in WA struggle to stay afloat at $US840/t.
Mines across Africa are sprouting up and aggressively chiselling away at WA’s market share as the world’s number one producer of hard rock lithium.
Citi reckons Zimbabwe, Rwanda and Nigeria — the three most prolific lithium mining countries in Africa — increased their combined production by approximately 168 per cent during 2024.
Most of the large-scale mining operations in Africa are funded by Chinese battery manufacturers. There are also reportedly a large number of illegal mines, many of which use child labour.
Nigeria’s government recently said it is trying to crack down on a lithium black market spread across the country’s south west.
https://thewest.com.au/business/mining/african-lithium-rush-dashes-hopes-of-wa-rebound-as-battery-demand-improves-c-17900070
