China’s Sinomine partially halts petalite mining in Zimbabwe as lithium prices crack

China’s state-owned Sinomine Resource Group partially suspended petalite mining recently at its Bikita lithium project in Zimbabwe due to multi-year low lithium prices, but industry sources said Oct. 11 that this development is unlikely to impact China’s lithium chemical markets.

Sinomine partially halted petalite mining at Bikita but has maintained production at its dense media separation plant, the company said Oct. 9 on a Chinese social platform owned by the Shenzhen stock exchange.

The suspension of petalite mining at the Bikita mine will not impact Sinomine's normal production activities, a company source told S&P Global Commodity Insights Oct. 11.

The decision to partially halt petalite mining stemmed from lower profitability of petalite products as lithium chemicals prices continued to hover at lower levels, Sinomine had said.

Lithium mineral can be sourced from petalite, as well as spodumene.

Sinomine has some petalite raw material reserves and its spodumene production can basically meet the demand of the company’s existing smelting capacity, the company said.

The Bikita mine, billed as Zimbabwe’s largest lithium mine, was acquired by Sinomine in 2022.

The mine reached a designed production capacity for its 2 million metric tons/year petalite expansion project and 2 million mt/year new spodumene project in November 2023. Both projects can produce 300,000 mt/year of petalite concentrates and spodumene concentrates each.

Sinomine has 4.18 million mt/year of lithium ore dressing capacity and 66,000 mt/year battery grade lithium chemicals production capacity as of June 2024, the company had said in its interim report earlier.

Lithium chemicals prices

Several global lithium miners are halting or scaling down production this year amid pressure caused by a persistent decline in lithium chemicals prices.

China lithium salts prices have been running at low levels this year, which might continue moving forward amid an oversupply in the market, sources said.

Platts assessed battery-grade lithium carbonate at Yuan 74,000 ($10,464)/mt on a DDP China basis Oct. 10, down 52.3% from a year earlier, Commodity Insights data showed.

After a slight rebound seen since September, the Chinese lithium chemicals market could now face some downside pressure amid slower seasonal demand going into November, sources said.

As overcapacity persists and surplus cannot be cleared out by downstream demand, lithium production will be released in large quantity as long as profit margins are generated when lithium carbonate prices rise, some sources said. This makes prices more volatile, they added.