Zimbabwe’s government unexpectedly suspended exports of lithium concentrate on Wednesday in a move to boost domestic processing and curb illegal shipments, sending shockwaves through global markets and driving lithium prices and shares of major producers sharply higher.
Lithium carbonate on the Guangzhou Futures Exchange jumped 5.4% to 177,000 yuan ($25,856) a ton. Shares of lithium companies rallied worldwide: Tianqi Lithium Corp. climbed as much as 7.3% in Hong Kong, Australia’s PLS Group Ltd. rose 7.6%, Sigma Lithium Corp. closed 30% higher in New York, and Albemarle Corp. gained 10%.
In an interview for “METALS 100,” John Passalacqua, CEO and Director of First Phosphate Corp. (CSE: PHOS) (OTC: FRSPF) (FSE: KD0), talked about the LFP batteries market and the company’s project and the infrastructure in Quebec. First Phosphate is a mineral development company fully dedicated to extracting and purifying phosphate for the production of cathode active material for the LFP battery industry.
Mines Minister Polite Kambamura said the ban took effect immediately and will remain in place until further notice. Only companies holding valid mining licenses and approved processing capacity will be granted export authorizations, he added. The policy is designed to encourage downstream processing of lithium and clamp down on illicit mineral exports.
Zimbabwe accounted for roughly 10% of global mined lithium last year, according to the U.S. Geological Survey. The decision is expected to further tighten global lithium supplies, which have already seen prices nearly double since November amid booming demand from the energy storage sector.
“The surge in lithium prices has been driven by strong demand from energy storage, and Zimbabwe’s export ban is likely to exacerbate the supply crunch, pushing prices even higher,” said Cameron Hughes, an analyst at consultancy CRU Group.
Citic Securities noted that while exports of lithium sulphate—an intermediate product—may not be affected immediately, the ban will have a significant impact on Chinese importers, as 19% of China’s lithium concentrate imports came from Zimbabwe last year.
Zimbabwe’s move echoes similar resource-nationalism trends worldwide. Last year, the Democratic Republic of Congo abruptly suspended cobalt exports for several months before replacing the ban with a quota system. Indonesia has repeatedly imposed controls on nickel and coal exports to stabilize prices.
Analysts at Jefferies said the timing and scope of Zimbabwe’s export controls exceeded market expectations. “While there were indications that Zimbabwe wanted to strengthen mining regulations and build local processing capacity, the abrupt ban on concentrate exports is largely unexpected and will tighten the market in the near term,” the bank said in a note.
With demand for electric vehicles and energy storage showing no signs of slowing, investors are closely watching supply-side developments. Zimbabwe’s ban adds fresh fuel to an already hot lithium market, raising the prospect of further price increases in the months ahead.
