Indonesia has announced its plans to explore lithium mining opportunities in Zimbabwe as part of a broader strategy to strengthen economic cooperation between the two countries. This move aligns with Zimbabwe’s ambitious goal of expanding its economy to $12 billion by 2030, primarily through its mining sector. The country’s battery assets have garnered attention at both the Indonesia-Africa Summit and the Forum on China-Africa Cooperation (FOCAC) in China, both taking place this week.
Zimbabwe is the largest lithium producer in Africa, and the Southern African country is attracting investors from around the world, including Indonesia and China.
Despite the challenges facing the nickel industry, such as the recent 40% drop in prices and significant production cuts, Indonesia has managed to maintain its dominance in the global nickel market due to its strategic partnerships with China.
Indonesia Downstream and Beneficiation success
However, Indonesia’s foray into Zimbabwe’s lithium mining suggests a desire to broaden its economic portfolio and reduce reliance on a single commodity.
According to a report published in early 2024 by the School of Geosciences at the University of Sydney, Australia, Indonesia has emerged as the clear leader in the global nickel “downstreaming industry”. The country’s efforts to move beyond raw material extraction and into higher-value processing have been nothing short of remarkable.
“Through a series of export bans alongside Chinese investment in smelters, Indonesia went from exporting unrefined ore pre-2014 to becoming the second largest producer of steel-grade nickel products by 2019. In 2021, the government created the mega state-owned enterprise, the Indonesia Battery Corporation (IBC), which aims to control 51% of nickel mines and smelters and 25-40% of cathode and battery production.”.
According to the article, the IBC has partnered with Chinese and Korean investors to build a new generation of H-PAL (high-pressure acid leech) smelters to produce battery-grade nickel products, cheaper than Australian imports.
Zimbabwe is a Lithium Big Deal
Indonesia’s investment in Zimbabwe’s lithium mining sector could signal a shift towards economic diversification for the Southeast-Asian nation. By expanding beyond its traditional focus on nickel production, Indonesia is positioning itself to capitalise on the growing global demand for lithium-ion batteries used in electric vehicles and renewable energy storage
During the ongoing discussions at the Indonesia-Africa Summit this week, President Jokowi has indicated Indonesia’s intention to further engage in the battery market by signing investment memorandums of understanding (MOUs) for Zimbabwean lithium.
According to the International Energy Agency (IEA), global lithium demand is projected to surge by more than 40 times by 2040. With Zimbabwe possessing the sixth-largest mineral reserves globally, including 220,000 tons of identified lithium reserves, the country presents a strategic partnership opportunity for Indonesia in this rapidly expanding market.
ESG Frontiers Editor @lloydnedohe_
