Africa’s lithium industry – long-term potential for high investment returns

by Ina King (Potgieter) August 20, 2020

Lithium makes up an increasingly important component of the technologies used by ordinary people around the world every day. While demand for this rare mineral crosses many industries, the largest demand is from the international battery sector, and this demand is expected to continue rising.

Africa, with 18 lithium mining projects at varying stages of development, from grassroots to operational, will be a major player in meeting this long-term demand. It presents massive opportunities for the entire supply chain.

What does the next decade have in store for lithium?

Many industry players are of the opinion that the 2020s are the decade for lithium and other battery metals.

Forecasts for the lithium sector in 2020 looked optimistic, although Covid-19 and its subsequent impact on worldwide production had a significant impact on the rare earth’s fortunes. However, with the shift to electric vehicles imminent, many OEMs have battery requirements up until 2024. The demand created by these OEMs, and manufacturing in other sectors, may soon lead to a lithium supply crunch and with it, a price increase. The ability to consistently produce battery-grade quality lithium will be key for producers of the mineral.

The lithium price is expected to increase in the next nine to 15 months. Market commentators predict demand to continue rising with major increases expected in 2021 and into 2022.

Research and consulting firm Roskill reports that longer term scenarios continue to show strong growth for lithium demand over the coming decade, with demand forecasted to exceed 1.0 Mt LCE (Lithium Carbonate Equivalent) in 2027, with growth in excess of 18% per year to 2030.

Here’s a rundown of Africa’s developing lithium projects

There are currently 18 lithium projects in development on 18 operational mines spread across the continent, but limited to only eight countries.

Zimbabwe

Zimbabwe has the largest lithium deposits in Africa. Its two largest mines are:

Bikita mine in the Masvingo province has reserves of 10.8 million tons of lithium ore and a lithium content of 150 000 tons (1.4%). This mine is Zimbabwe’s largest lithium mine, located in the Masvingo Province of Zimbabwe about 64 km from Fort Victoria, and has been in operation since 1911. It is also seen as the largest petalite deposit in the world.

Arcadia Lithium Mine As of October 2017, the mineral resources of the mine meeting JORC specification are 43.2 million tons, of which proved and controlled resources are 37.4 tons, and pre-mining reserves are 15.8 million tons. It is expected to reach annual production of 2.5 million tons of lithium when deployed at the end of 2021, and the mine expects its lithium deposits to create about $3 billion in exports.

The Kamaviti Lithium Tailings Project is currently in bankable phase, and the Odzi West Lithium Project, in grassroots phase, has confirmed the presence of spodumene in one area and petalite in another.

The country is also host to the Zulu Lithium And Tantalum Project, where historical exploration results established it as prospective for lithium and tantalum, and a target estimation suggested that 1.4 million tonnes of pegmatite at a possible grade of 1.4 % LiO2 may be present.

DRC

Buckell Lithium Project in the prefeasibility phase consists of 2 Greenfield Mineral Licences, each covering an area of 460 km². The grassroots Kamola Lithium Project is located within the Mid-Proterozoic Kibaran Belt, an intracratonic domain extending over 1 300 km through Katanga into southwest Uganda.

The Manono Lithium Tin Project is in the feasibility phase and one of the largest rich Lithium Caesium Tantalum (LCT) pegmatite deposits in the world.

The Manono-Kitotolo Tailings Project, in the prefeasibility phase, is located on the site of the former Manono-Kitotolo Mine. A preliminary estimate reports the complete tonnage of the tailings to be between 85 and 100 Mt, consistently grading between 0,5% and 1% lithium.

Ghana

The Egyasimanku Hill Lithium Project, in grassroots phase, covers roughly 238 km², with a further identified 10 km pegmatite swarmed veins. The tenure package is also highly probable for tin, tantalum, niobium and gold.

Namibia

The Karibib Project is in the prefeasibility phase and encompasses 4 granted tenements encompassing 1 054 km of the Karibib Pegmatite Belt in central Namibia. Dominant lithium minerals are lepidolite, lithium-mica and petalite, with minor cookeite and amblygonite and spodumene traces.

Madagascar

The Millie Reward Lithium Project is in the grassroots phase and holds prospective conventional spodumene-hosted lithium with noticeable pegmatite dykes and sill within the permits over 10 m in thickness. Pegmatite dykes with sizeable spodumene mineralisation and grades of up to 6,9% lithium with sub-horizontal to horizontal positioning over a large strike length occur.

Mozambique

The Mozambique Hard Rock Lithium Project is in the grassroots phase and forms part of a 170 km long belt within the Alto Ligonha Pegmatite Field in northern Mozambique. It consists of 6 licences and the project area is known to contain several large sodalithic-type (LCT) pegmatites, which may contain lithium mineralisation.

Mali

The Bougouni Lithium Project in the feasibility phase consists of 2 concessions named the Kolassokoro and Madina licence areas. The project has a proposed minimum Life of Mine (LOM) of 8½ years with a total LOM production of 1.94 million tonnes of concentrate to take place over three open-pits.

Looking for more information on Africa’s lithium mining industry?

Prospective lithium investors interested in the African market can rely on AMIQ’s extensive insights and vast African mining database.

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