FINANCE FORUM • these transactions , followed by graphite and REEs . Despite this sentiment , a clear decline in the amount of capital raised and the number of projects financed by juniors in this space was observed globally over the 2021-2022 period . This was a market reaction to unfavourable macroeconomic conditions such as rising interest rates and persistently high inflation . Lower levels of capital may have also resulted in fewer acquisitions , delayed capital projects or project development .
All but two of the lithium transactions occurred in southern Africa . Zimbabwe is the largest lithium producer on the continent , owing to the Bikita lithium mine . Many of the prospective lithium areas are located near well-developed infrastructure and urban centres , making them more attractive to investors . These factors were certainly considered during a recent global wave of transactions , led by Chinese companies aimed at securing additional supply . These included :
• The advanced-stage Arcadia project which was sold to Zhejiang Huayou Cobalt Co . by ASX-listed Prospect Resources , for a total consideration of USD422-million , and
• Sinomine Resource Group acquiring a 74 % stake in Bikita for USD180-million ( S & P Global , accessed 2023 ).
Namibia is widely considered to be an emerging lithium jurisdiction , with investors over the last two years targeting earlierstage projects . Explorers and developers have additionally been relatively successful at re-visiting legacy tin-tantalum deposits with a renewed lithium focus – an approach being successfully followed globally . Junior tin miner Andrada Mining ( formerly AfriTin ) has also confirmed the presence of lithium mineralisation at their flagship asset , Uis tin mine , reporting drill intercepts of 1.6 % Li2O over 59m in their latest technical report ( Andrada Mining - Regulatory News , https :// polaris . brighterir . com / public / andrada _ mining / news / rns / story / xoo1nmx , accessed 18 April 2023 ).
Other battery metals projects have also seen an uptick in M & A activity . This includes graphite projects mostly in Mozambique and REE projects in Malawi , South Africa and Tanzania . There has also been renewed interest in other REE projects in Namibia and South Africa , demonstrated by funding from the Japan Oil , Gas and Metals National Corporation ( JOGMEC ) to jointly explore , develop , exploit , refine and / or distribute mineral products from Lofdal in Namibia ( Namibia Critical Metals Inc ., https :// www . namibiacriticalmetals . com / projects / lofdal-heavy-rare-earths-project , accessed 2023 ). Similarly , in South Africa , Steenkampskraal received significant investment from Monoceros Mineral Resources in 2022 , to fund mining activities and an initial public offering ( IPO ) on the Johannesburg Stock Exchange ( Global Mining Review , Monoceros Mineral Resources invests in Steenkampskraal Rare Earths | Global Mining Review , accessed 18 April 2023 ).
Mechanisms to develop value chains As per Deloitte ’ s 2023 Tracking the Trends , mining companies play a critical role in supplying the minerals and metals needed to develop a modern and de-carbonised world . As a result , supply chain security is becoming more of an imperative , presenting an opportunity for a globally connected business . In the supply of battery metals , mining companies have demonstrated vertically integrated business models engaging in joint ventures ( JVs ) to establish supply for mid-market beneficiation and fabrication .
Producers can consider developing capabilities in downstream activities , whether through partnerships or vertical integration , to provide additional value and more sustainable growth that is less susceptible to commodity price fluctuations . One example is that of integrated vanadium producer , Bushveld Minerals , with activities in vanadium ore extraction and processing in South Africa , as well as developing and promoting the role of vanadium in the growing global energy storage market through application in vanadium redox flow batteries . Another example is that of the Manganese Metal Company in South Africa . The company has the processing plant capacity to provide electrolytic manganese from the country ’ s well-known and extensive resources , which include battery-grade manganese from projects being developed in the region . This facility has enabled the export of high-grade products as well as application in numerous localised downstream manufacturing processes . Furthermore , the facility is described as the world ’ s only non-China based producer of high-grade electrolytic manganese metal and the world ’ s largest refinery of 99.9 % ( selenium-free ) electrolytic manganese ( Manganese Metal Co ., https :// www . mmc . co . za /, accessed 2023 ).
A key consideration when assessing the ability for juniors to succeed in this space is the incentives framework offered by the countries in which these companies operate . Countries may commit to building up their downstream industrial sectors through several mechanisms , which would result in expanding the extractives sector and developing a labour force that has expertise in activities such as mineral beneficiation , refining , and even battery manufacturing .
One such mechanism is trade and industrial policy . Zimbabwe recently implemented a trade ban on raw lithium exports in response to the wave of foreign direct investment ( FDI ) into lithium projects . This mechanism is primarily aimed at stimulating downstream activities within the value chain , such as local beneficiation , and even battery manufacturing . An export ban like this typically has more success if the imposing country has the capacity to develop the downstream sector . Zimbabwe appears to be positioning itself in this regard , having signed several multi-billion-dollar deals with foreign investors to develop mining operations and battery metals processing facilities , which will include lithium , nickel and platinum . A comparable initiative in recent times is the Indonesian ban on nickel laterite ore exports , with the aim of developing the domestic nickel value chain .
In addition to trade and industrial policy , broader economic approaches that governments can take to develop these value chains and promote battery metals value chain industrialisation include ( 1 ) providing alternative economic incentives to producers to beneficiate themselves locally , such as favourable royalty rates for refined or treated metals ; ( 2 ) attracting local companies to install processing and other downstream capabilities through subsidies / tax relief ; ( 3 ) encouraging lenders , like development banks , to provide capital aimed at the expansion of industrial parks and implementation of special economic zones ; and ( 4 ) allowing foreign companies to establish downstream facilities ( as seen in the example above ). Trade policies and other government incentives can be short-term initiatives , aimed at boosting a developing market .
Considerations for successful implementation Like many parts of Africa , southern Africa generally has more capability in upstream production compared to downstream activities . In addition , mineral deposits are geographically concentrated in some countries , with intermittent and limited
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