Falling lithium prices have dominated headlines in the past year, but meanwhile a quiet revolution has been unfolding in Africa. Large investments have been made in the continent towards mines looking to capitalise on lithium's low costs to produce spodumene and other lithium products. Argus spoke with UK exploration and development company Aterian's executive chairman, Charles Bray, ahead of the African Mining Indaba in Cape Town over 5-8 February. Bray shared his thoughts on the evolution of Africa's lithium market and details of Aterian's new lithium mine in Rwanda. Edited highlights follow:
Could you give us an overview of your lithium project in Rwanda?
In Rwanda, we have a project called HCK. It's in the southern part of the country and approximately 2,700 hectares. It's a joint venture with [UK-Australia mining firm] Rio Tinto, with Rio Tinto acting as the operator. We've now done all the ground mapping and survey work so we're at the stage that the project is ready to be drilled. We're excited about the prospect of getting some results out — we expect to have the initial preliminary drill results out in the second quarter of this year, and to ideally have drilled 3,000-4,000m over the course of the year.
The main product would be lithium. The other by-products are the classics — this was a coltan site originally so you have significant amounts of tantalum and niobium, and also tin.
What is the mining environment like in Rwanda?
There's ourselves. But there's also [Rwandan metals producers] Trinity Metals and Ngali. These three are what I call similarly sized, relatively professional mines. And when I say relatively professional, it's relative to the artisanal miners.
It's a good environment from the standpoint that the government is trying to encourage us to grow and to do a fair bit of exploration. It can be a little difficult because there aren't a lot of small developing mining companies, or the rules in place that you typically see. And so we often have to present our plans and objectives and get approval on a one-on-one basis as opposed to in a rules-based environment.
How do you expect the African lithium space to develop over the next few years?
I expect there will be several sources identified in west Africa, as there already has been with [Australian developer] Atlantic Lithium. And I expect there will be a couple of lithium provinces identified in central and east Africa.
The way that I see it panning out — Zimbabwe has a lot of very interesting features but the actual mineralogy may be difficult, so we'll see if that's a spodumene type of lithium. In Rwanda, which I distinctly believe to be a new lithium province, there will be good spodumene identified. And we're hoping, let's say for HCK, to have 40mn t plus. It's possible we could have more, it's possible we'll have less, but that's the type of site that I'm expecting to find in multiple locations across Rwanda.
In west Africa, I think you're going to find some very interesting lithium in Guinea and Ghana. From that, what you'll find is a local concentrator being developed and then ultimately a refinery somewhere else on the continent.
Do you expect Africa to go down the route of lithium concentration? And could it compete in this area with the likes of South America and Australia?
Yes, but I think it depends on the jurisdiction. One of the things we like a lot about Rwanda is that the spodumene we've identified is near the surface. There's relatively low overburden, the infrastructure in the country is very good and renewable power is ample.
One of the things we don't like, nothing personal, it is very densely populated. There's a lot of concerns you have to factor in, such as how we are impacting the local population. That doesn't necessarily impact on cost — it has some impact, but not much.
How does it compare with the rock product that comes from Australia?
Depending on where you are, the grades can be stellar. I think what you're going to find is that, in Australia, you can mine significant amounts of lithium and then give it to a port and have it refined somewhere, and you have a fairly cost-effective product.
In Africa, relatively speaking, you're going to have some very good lithium grades coming from some of these pegmatites. The question will be, where does it get concentrated or refined, and then shipped on from there? Because of Australia's relative proximity to China, Australia makes a lot of sense as a supplier to the Chinese market. And I think Africa is going to make a lot of sense as a supply source for the European markets, and Latin America naturally for North American markets. Everything is heading from south to north.
How do you see the wider lithium market developing in 2024?
I think in 2024 we will start to see a bottom in terms of lithium pricing. I don't necessarily think the price decline is the worst thing, because it's forcing people to make smart decisions — as opposed to a year to 18 months ago when it was just about finding lithium.
Now it's again about getting back to finding it in the right place and being able to deliver it to the right place. I think that's going to cause investment decisions to be a little bit wiser, sounder and ultimately longer lasting.
So I see prices stabilising and investment going into good areas like Rwanda and Ghana. There will be a shake-out of some weaker players and people who haven't thought through their business models. I think it would be a good flip to a firm footing and then just onwards and upwards.
