HARARE
–
Zimbabwe’s
poor
infrastructure
and
policy
inconsistencies
are
worsening
the
impact
of
depressed
lithium
prices
on
producers
of
the
material
mainly
used
in
battery
technologies,
a
Zimbabwean
unit
of
China’s
Sinomine
Resource
Group
(002738.SZ),
said.
Africa’s
top
producer
of
lithium
has
attracted
over
$1
billion
investment
from
Sinomine
and
its
Chinese
peers
such
as
Zhejiang
Huayou
Cobalt
(603799.SS),
and
Chengxin
Lithium
Group
(002240.SZ),
since
2021
as
China
sought
to
maintain
its
grip
on
critical
metals.
However,
lithium
prices
have
fallen
sharply
from
their
2022
peak
as
a
wave
of
new
supply
has
overwhelmed
weaker
than
expected
demand
for
electric
vehicle
batteries.
The
price
slump
“is
making
it
difficult
for
lithium
companies
to
stay
afloat,
with
most
mining
entities
downscaling
production”
and
laying
off
workers,
Sinomine
unit
Bikita
Minerals
told
visiting
lawmakers,
according
to
a
presentation
seen
by
Reuters
on
Tuesday.
“The
lithium
mines
continue
to
operate
in
an
environment
with
risks
which
include
fragile
power
supply,
capital
constraints
and
foreign
currency
shortfalls,”
the
company
said.
There
was
also
lack
of
“clear
and
consistent
policies
on
licensing,
taxation
and
export
regulations”,
it
said.
Bikita
Minerals
added
that
Zimbabwe’s
foreign
currency
regulation
requiring
exporters
to
trade
25%
of
their
hard
currency
earnings
for
a
rapidly
weakening
local
unit
called
the
ZiG
was
resulting
in
loss
of
value.
“Lack
of
basic
infrastructure,
such
as
roads,
transportation,
power
and
water
supply
in
lithium-rich
regions
is
hindering
exploration
and
extraction
of
lithium
reserves,
significantly
influencing
production
costs,”
it
said.
The
government
could
help
lithium
miners
by
introducing
tax
breaks
and
lower
royalties,
the
company
said.
Both
the
mines
and
finance
ministries
were
not
immediately
available
to
comment.