Zimbabwe halts exporting lithium — and China is happy about it

Zimbabwe’s abrupt decision to suspend exports of raw minerals and lithium concentrates has sent tremors through global commodity markets, pushing up Chinese lithium futures prices and sharpening concerns about supply stability just as energy storage demand gathers pace.

On Thursday, the most actively traded lithium carbonate contract on the Guangzhou Futures Exchange surged 6.07 per cent to 178,020 yuan ($26,043.45) a metric ton around 9 am IST. Earlier in the session, prices had spiked more than 9 per cent to 187,700 yuan — underscoring the market’s sensitivity to supply-side shocks.

Zimbabwe pulls the plug on raw exports

Zimbabwe on Wednesday ordered an immediate suspension of exports of all raw minerals and lithium concentrates. The move is widely seen as part of a broader strategy to promote domestic value addition and curb the outflow of unprocessed resources.

The southern African nation is the largest lithium producer in Africa and a critical supplier to China’s battery ecosystem. It exported 1.128 million tonnes of spodumene concentrate in 2025, up 11 per cent from the previous year, with the bulk of shipments headed to Chinese buyers.

By halting raw exports, Harare is tightening the spigot on a key feedstock used in lithium carbonate and hydroxide production — materials central to electric vehicle (EV) batteries and large-scale energy storage systems.

Why China stands to gain

At first glance, the export ban appears disruptive for Chinese refiners but China may ultimately benefit.

Chinese mining giants such as Zhejiang Huayou Cobalt and Sinomine have made substantial investments in Zimbabwe’s lithium assets in recent years. With boots already on the ground, these firms are well placed to pivot toward in-country processing if Harare accelerates plans to develop domestic refining capacity.

Such a shift could deepen China’s strategic grip over upstream lithium assets while aligning with Zimbabwe’s ambition to move up the value chain. Instead of merely importing raw spodumene, Chinese-backed operations could refine material locally before shipping higher-value products to China.

In that sense, while short-term price volatility is inevitable, longer-term supply chains may become more vertically integrated — and more tightly linked to Chinese capital and technology.

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Energy storage boom fuels price rally

Expectations of a boom in grid-scale energy storage systems have driven a rally in lithium prices since the second half of 2025. As renewable energy penetration rises globally, utilities are increasingly investing in battery storage to stabilise power supply.

That structural demand story has already tightened sentiment in lithium markets. Zimbabwe’s move adds a fresh layer of uncertainty, particularly for traders wary of geopolitical and regulatory risks in key resource-rich nations.

The 6 per cent-plus jump in Guangzhou futures highlights how quickly supply-side headlines can translate into price action. If the suspension is prolonged, or replicated by other producers seeking to capture more value domestically, lithium markets could face renewed bouts of volatility.

Supply security back in focus

For China, which dominates global lithium refining and battery manufacturing, securing stable raw material flows is a strategic imperative. The export halt by Africa’s top lithium producer serves as a reminder that upstream risks can emerge abruptly.

For Zimbabwe, the gamble is whether restricting raw exports will catalyse meaningful investment in local processing — without deterring foreign capital or triggering unintended trade frictions.