Africa is transitioning from peripheral lithium supplier to strategic cornerstone of global battery supply chains, with 2025 marking the continent as the largest source of new lithium supply globally-exceeding all other regions combined. Mined lithium production is projected to increase more than tenfold this decade, potentially representing 12% of global supply. Yet this remarkable ascent unfolds against a backdrop of collapsing prices, Chinese market dominance exceeding 90%, and increasingly assertive resource nationalism that is reshaping project economics and geopolitical alignments. For energy executives, insurers, financiers, and government stakeholders operating in Africa, understanding this inflection point is no longer optional-it is strategic imperative.

As of November 2025, Africa’s lithium sector has entered a paradoxical phase characterized by surging production volumes amid sustained price weakness. Lithium prices stand at approximately 92,050 CNY per ton (roughly $12,900), having recovered modestly from four-year lows below $10,000 per ton earlier this year. Chinese lithium carbonate prices rallied in early November to reach 95,200 yuan ($13,401) per metric ton on November 17-the highest since June 2024-yet remain approximately 85% below 2022 peak levels when prices exceeded $80,000 per ton.

Despite this price environment, Zimbabwe exported 586,197 tonnes of spodumene concentrate between January and June 2025, representing a 30% increase from 451,824 tonnes during the same period in 2024. This growth trajectory extends continent-wide. Mali has rapidly ascended to become Africa’s second-largest producer. Mali’s Goulamina Project, operated by China’s Ganfeng Lithium, achieved first production in January 2025 with Phase 1 capacity reaching 506,000 tons, while UK-based Kodal Minerals began spodumene concentrate production at its Bougouni Project in Mali in February, targeting a steady monthly output of 10,000 tons primarily destined for China.

Zimbabwe maintains continental leadership through major operations including the Arcadia mine and Bikita mine, complemented by newer entrants. Premier African Minerals commenced operations at its Zulu Lithium Plant in Zimbabwe in July 2025. Beyond these established producers, Ghana’s Ewoyaa project is advancing toward becoming the country’s first lithium-producing mine, while Namibia’s Karibib project continues development.

The Democratic Republic of Congo’s massive Manono lithium deposit-holding an estimated 11 million metric tons of lithium-remains the sector’s greatest unrealized opportunity. After years of shareholder disputes and financing challenges, momentum is building. Chinese mining giant Zijin Mining announced in January 2025 that the Manono project is scheduled to commence production in Q1 2026, though execution risks remain substantial given the project’s troubled history.

Notably, UK-based Aterian and global major Rio Tinto announced Rwanda’s first lithium find at the HCK Lithium Project in July 2025, expanding the continent’s lithium footprint beyond traditional producing jurisdictions. Atlantic Lithium reported the discovery of spodumene-bearing pegmatites at its Agboville and Rubino licenses in Ivory Coast in March 2025, suggesting significant additional resource potential awaits discovery.

The defining characteristic of Africa’s lithium sector remains overwhelming Chinese control. Chinese companies dominate extraction, processing investment, and offtake agreements across the continent’s major producing nations. Chinese companies including Zhejiang Huayou Cobalt, Sinomine Resource Group, Chengxin Lithium Group, Yahua Industrial Group, and Tsingshan Holding Group have collectively invested more than $1.4 billion since 2021 to acquire and develop lithium assets in Zimbabwe alone. This pattern replicates across Mali, Namibia, and the DRC.

China’s strategy is transparent and methodical: secure upstream raw materials to feed domestic processing capacity-which handles 60-70% of global lithium refining-while diversifying away from Australian dependence and establishing supply chain resilience. In 2023, Australia supplied approximately 79% of China’s spodumene imports. African lithium provides Beijing with geographic diversification, lower logistics costs for processing facilities, and strategic leverage in an increasingly contested critical minerals landscape.

However, African governments are pushing back forcefully against pure extraction models that capture minimal value domestically. Zimbabwe represents the vanguard of this resource nationalism. The country banned exports of unprocessed lithium ore in December 2022, then escalated substantially. In June 2025, Zimbabwe announced plans to ban exports of lithium concentrates effective January 2027, permitting only exports of lithium sulphate and higher value-added products. Lithium sulphate processing plants are currently under development at two major Zimbabwean operations: Bikita Minerals, owned by China’s Sinomine, and Prospect Lithium Zimbabwe, owned by Zhejiang Huayou Cobalt.

Tanzania has implemented similar beneficiation mandates requiring in-country refining facilities alongside extraction operations. These policies fundamentally alter project economics and execution timelines. They create genuine opportunities for downstream investment and industrial development, but simultaneously introduce regulatory uncertainty, technology transfer requirements, and capital intensity that many operators struggle to accommodate.

The tension between host government aspirations for value capture and investor demands for predictable, bankable frameworks defines the sector’s political economy. Zimbabwe’s approach illustrates this dynamic clearly. Initially, the government mandated that lithium miners submit local refinery plans by March 2024. However, collapsing lithium prices in 2023-2024 forced pragmatic flexibility. The government adopted case-by-case assessments of beneficiation plans rather than blanket enforcement, acknowledging market realities while maintaining policy direction.

This flexibility carries costs. Smuggling and corruption have reportedly increased as enforcement becomes inconsistent, a pattern observed in Zimbabwe’s diamonds, gold, chromium, and iron ore sectors similarly dominated by Chinese firms. For risk managers and compliance officers, these dynamics create exposure to sanctions violations, anti-corruption enforcement, and ESG controversies that extend far beyond traditional mining risks.

Zimbabwe: Coerced Integration

Zimbabwe’s approach represents state-directed vertical integration through regulatory mandate. Chinese operators initially resisted local processing requirements, citing infrastructure deficits and price volatility. In 2024, Bikita Minerals (owned by Sinomine Resource Group) reduced production and cut jobs, attributing the decision to poor infrastructure, inconsistent policies on licensing, taxation and export regulations, as well as fluctuating global lithium prices. The government’s response combined accommodation-allowing continued concentrate exports through 2026-with firmness on the 2027 deadline.

The result is significant capital flowing into processing infrastructure that might not otherwise materialize. Whether these facilities achieve commercial viability at current lithium prices remains uncertain. The projects represent genuine industrial upgrading if prices recover; they become stranded assets if prices remain depressed or if technical execution falters. For insurers underwriting construction and business interruption coverage, these projects present complex risk profiles combining political, technical, market, and counterparty exposures.

Mali: Greenfield Scale

Mali’s trajectory differs from Zimbabwe’s brownfield beneficiation push. Ganfeng Lithium’s Goulamina project entered production in January 2025 as a large-scale greenfield development with integrated processing from inception. The project targets 506,000 tons of annual lithium concentrate production in Phase 1, with planned doubling in Phase 2. This represents patient, large-scale capital deployment by a state-linked Chinese enterprise with guaranteed downstream offtake.

However, Mali’s security environment introduces risks absent in Zimbabwe. The country faces persistent terrorism, military coups, and governance instability. Russian mercenary presence and deteriorating relations with France and ECOWAS partners create geopolitical crosswinds. For Western insurers and financiers, Mali projects carry heightened political violence, expropriation, and sanctions exposure that constrain participation regardless of project quality.

DRC: The Manono Enigma

The DRC’s Manono project epitomizes African lithium’s promise and peril. Holding potentially the world’s largest hard-rock lithium deposit, Manono has languished for years amid shareholder disputes between Australian junior AVZ Minerals and Chinese state-owned Zijin Mining, questions over mining license validity, and financing difficulties. Zijin’s announcement of planned Q1 2026 production represents meaningful progress, yet skepticism remains warranted given the project’s history.

Manono’s eventual development-if achieved-could reshape global lithium supply. Its failure would underscore the institutional and governance barriers that prevent many African jurisdictions from monetizing geological endowment. For government stakeholders across the continent, Manono serves as cautionary tale: resource wealth alone guarantees nothing without credible institutions, transparent licensing, and consistent application of legal frameworks.

Actual commissioning progress for African lithium projects frequently falls short of expectations due to factors such as poor infrastructure and policy uncertainties. This understates the challenge. Power availability, water access, and transportation logistics represent binding constraints across most African producing jurisdictions.

Zimbabwean operations face chronic electricity shortages requiring expensive captive generation. Road and rail infrastructure to ports-whether Beira in Mozambique or Durban in South Africa-adds material logistics costs. Projects located hundreds of kilometers inland face transport expenses that can render otherwise attractive resources uneconomic at current lithium prices.

Water requirements for lithium processing present another constraint often underestimated at feasibility stage. Sulphate production facilities require reliable, high-volume water access. In water-stressed regions, this introduces environmental controversy, community conflict, and operational vulnerability during drought periods.

For project developers and financiers, these infrastructure deficits demand significantly higher capital intensity than comparable Australian or Canadian projects. They also extend development timelines, increase execution risk, and require government partnerships-often with fiscally constrained host governments-to address systemic bottlenecks. Projects that do not rigorously stress-test infrastructure assumptions at feasibility stage face major cost overruns or abandonment.

Implications for Capital and Risk Management

For Investors and Financiers

African lithium presents asymmetric risk-reward profiles demanding sophisticated evaluation frameworks. Projects with Chinese backing benefit from patient capital, guaranteed offtake, and technical support from established battery supply chains. However, they face heightened scrutiny from Western governments pursuing supply chain diversification under “friend-shoring” initiatives. Capital may become politically stranded if geopolitical tensions intensify.

Western-backed projects theoretically align with U.S., European, and allied government priorities for supply diversification outside Chinese control. However, these projects struggle to match Chinese financing terms, execution speed, and offtake certainty. Most Western lithium developers lack the vertically integrated supply chains that make Chinese operators competitive. They require expensive third-party processing agreements and face merchant price exposure that Chinese state-linked enterprises avoid through internal transfer pricing.

Current lithium prices below $13,000 per ton challenge many African projects’ economics. Breakeven costs vary widely based on ore grade, processing route, and infrastructure access, but most analysts estimate African hard-rock projects require sustained prices above $15,000-18,000 per ton for acceptable returns. Industry executives and analysts noted that 60-70% of the global cost curve was not making money at current prices, including even the large Greenbushes mine in Australia, which had scaled back production.

This environment demands rigorous downside scenario analysis. Projects financed assuming $20,000+ lithium prices face severe distress if current price levels persist through 2026-2027. Those with flexible capital structures, low-cost deposits, and diversified product strategies (tantalum, tin, cesium byproducts) demonstrate greater resilience.

For Insurers and Reinsurers

African lithium operations present multifaceted risk profiles requiring specialized underwriting expertise. Traditional mining risks-construction delays, operational disruption, commodity price volatility-compound with political violence exposure, expropriation risk, currency controls, and sanctions complexity.

The sector’s Chinese concentration amplifies several risk categories. Sanctioned entity exposure requires enhanced due diligence as Western sanctions regimes increasingly target Chinese state-owned enterprises with military-civil fusion connections. Beneficial ownership opacity in many Chinese-African joint ventures creates compliance challenges for insurers subject to Know Your Customer requirements.

Beneficiation mandates introduce additional loss drivers. Processing facilities represent higher capital values at risk, require more sophisticated technical operation than mines alone, and face greater business interruption exposure when feedstock supply or power availability disrupts operations. Insurers must price these elevated exposures while competing with Chinese state-backed insurance providers offering terms that may not reflect actual risk.

ESG-related liabilities merit particular attention. Community conflict over water access, artisanal miner displacement, environmental contamination, and labor practices create reputational risk and potential litigation exposure. Chinese operators face different stakeholder pressures than Western firms, creating inconsistent sector-wide standards that complicate baseline risk assessment.

For Government Stakeholders

African governments face difficult trade-offs between maximizing immediate revenue capture and attracting long-term investment in competitive global markets. Aggressive beneficiation mandates, export restrictions, and local content requirements can drive investment to more accommodating jurisdictions-Namibia, Zambia, or Latin American alternatives.

The DRC’s prolonged struggle to monetize its cobalt reserves despite holding approximately 70% of global reserves illustrates this risk. Excessive taxation, bureaucratic dysfunction, licensing uncertainty, and corruption drive investors away despite world-class geology. Zimbabwe must avoid similar outcomes in lithium.

Optimal policy frameworks balance legitimate demands for value capture with realistic assessment of investor alternatives. Gradual beneficiation requirements with extended compliance timelines-Zimbabwe’s approach allowing concentrate exports through 2026-demonstrate such pragmatism. So do differentiated treatment based on project scale, with smaller operators permitted to use tolling arrangements with larger processors rather than building standalone facilities.

Transparent, consistently applied regulatory frameworks matter more than specific policy content. Investors can accommodate high taxation or strict local content rules if applied predictably. They cannot accommodate arbitrary license revocations, retroactive tax changes, or selective enforcement driven by political considerations or corruption. Governments that recognize this distinction attract durable investment; those that do not face transient extractive arrangements that maximize near-term rents while foreclosing long-term industrial development.

Africa’s lithium trajectory through 2026-2027 will establish patterns persisting for decades. Several factors warrant close monitoring:

Price Recovery Timing and Sustainability

November 2025 has seen a rally in Chinese lithium prices, with lithium carbonate reaching 95,200 yuan ($13,401) per metric ton on November 17, representing a 17% monthly gain. Whether this represents sustainable recovery or speculative positioning remains unclear. Industry analysts expect global lithium demand to increase 26% to 1.46 million tonnes in 2025 on a lithium carbonate equivalent basis, up from an estimated 1.15 million tonnes in 2024, suggesting fundamental support for price recovery.

However, supply additions continue. High-cost producers in Australia and China have begun curtailing operations, but African supply growth proceeds largely unabated given lower cost positions and government pressure for continued production. The market may require sustained prices below $12,000 per ton for extended periods to force sufficient supply rationalization.

Beneficiation Policy Evolution

Zimbabwe’s January 2027 concentrate export ban represents a critical test case. If processing facilities achieve successful commissioning and commercial operation, expect Tanzania, Namibia, and potentially Mali to implement similar mandates. If facilities fail to materialize or operate uneconomically, governments may retreat to more modest beneficiation requirements.

The DRC’s approach to Manono will signal its policy direction. Whether the DRC imposes local processing requirements or permits concentrate exports will indicate whether pragmatic or ideological considerations drive policy. Given the DRC’s desperate fiscal position, expect initial flexibility to secure production startup, with beneficiation requirements potentially tightening once operations stabilize.

Western Engagement Credibility

The United States, European Union, United Kingdom, and partners have announced numerous critical minerals initiatives targeting African supply. These include development finance, offtake agreements, and technical partnerships. Whether these translate into meaningful capital deployment and sustained engagement-rather than announcements without follow-through-will determine whether Chinese dominance is contestable.

Early indicators remain mixed. Western governments face domestic political constraints on long-term commitments. Development finance institutions move slowly relative to Chinese policy banks. Private sector participants demand returns incompatible with patient capital requirements. Absent material shift in Western government risk appetite and financial commitment, Chinese dominance likely persists and potentially deepens.

Chinese Strategy Adjustment

Beijing’s appetite for African lithium acquisitions remained strong through 2025, but several factors may temper future investment. Declining domestic EV growth rates, battery manufacturing overcapacity, and lithium price weakness reduce urgency for additional upstream exposure. Capital constraints at heavily indebted Chinese mining companies may limit acquisition capacity.

Any Chinese pullback creates opportunities for alternative capital sources-Australian miners, Gulf sovereign wealth funds, Western private equity. However, these investors lack China’s strategic imperative for lithium supply security and may prove opportunistic rather than committed partners during market downturns.

Geopolitical Risk Escalation

U.S.-China tensions, potential sanctions expansion, and trade restrictions introduce discontinuous risks difficult to model. If Chinese lithium operations in Africa face Western sanctions, reinsurance restrictions, or payment system exclusions, projects could become commercially unviable overnight regardless of underlying economics. For capital allocators, this tail risk demands hedging through geographic and counterparty diversification.

Africa’s lithium sector has transitioned from peripheral supply source to strategic necessity for global battery manufacturing. This transition is irreversible. The continent’s 4.9 million tons of identified reserves, low-cost deposits, and proximity to emerging processing markets ensure continued production growth regardless of near-term price volatility.

For energy and minerals executives, the strategic imperative is understanding how Africa’s supply expansion affects global market balances, pricing dynamics, and competitive positioning. For insurers and reinsurers, it requires developing specialized underwriting capabilities for politically complex, technologically challenging operations with concentrated Chinese ownership. For investors and financiers, it demands rigorous assessment of which projects offer genuine value creation versus those likely to destroy capital in a structurally oversupplied market. For government stakeholders, it necessitates policy frameworks balancing value capture with investment attraction, recognizing that resource wealth alone guarantees nothing.

The question facing all stakeholders is not whether Africa will become a major lithium supplier-that is established fact. The question is who captures the value, who bears the risks, and whether Africa’s lithium resources catalyze broader industrial development or replicate extractive patterns that have characterized the continent’s resource sectors for generations. The answers will emerge over the next 18-24 months as current production ramps mature, beneficiation mandates face enforcement deadlines, and lithium prices either recover toward incentive levels or remain depressed, forcing wholesale sector restructuring.

Those who dismiss African lithium as high-risk, distant-future supply have already missed the inflection point. The quiet race has become a sprint, and positioning now determines competitive advantage for the decade ahead.