The argument by the Organisation for Economic Cooperation and Development (OECD) that tightening South Africa’s wealth tax regime would rebalance ... generational inequality has a fundamental flaw: it targets a “flighty” base, says an expert from the African Tax Institute.
With the exception of Australia, which dominates hard-rock lithium mining, “the world has not woken up to the huge disparity in supply and demand” for lithium, Viljoen says in Johannesburg. Europeans are in a “dreamworld. There’s no way your cars will be all-electric by 2030,” or any time soon after.
AfriTin trades on the Namibian stock exchange and London’s Alternative Investment Market (AIM). It has four projects in the country’s western Erongo area. These include tin, lithium, tantalum and copper resources, with existing tin operations at the Uis mine. The company’s target is to become a global Tier 1 mining company with revenue of $500m and a market cap of $1bn.
Batteries accounted for 74% of global lithium consumption in 2021, versus 23% in 2010, driven by electric car demand. Lithium is also needed for a range of other applications, such as laptops, mobile phones, planes, trains and bikes. Credit Suisse thinks demand could treble between 2020 and 2025, by when the International Energy Agency (IEA) says the world could be facing a global shortage.
- Namibia, AfriTin says, is well placed to benefit as a mining jurisdiction. It ranked second in Africa in the Fraser Institute’s 2021 Policy Perception Index behind Morocco, and has an upgraded deep-water port about 230 km from Uis at Walvis Bay.
- The IEA says that only a handful of companies can currently produce high-quality lithium products. Viljoen says that 80% of junior lithium miners won’t make it into production.
- The world’s lithium discoveries are nowhere near enough to meet long-term demand, Viljoen says. African governments need to realise the opportunity and “encourage investors without selling the crown jewels,” he says.
- “Lithium is going to be the new oil. There’s a huge opportunity for Africa to step up to the plate.”
China’s lithium thirst
China, Viljoen says, is “trying to buy up every last bit of lithium that it can” globally. He contrasts their approach in countries such as Zimbabwe, where they arrive ready to invest in lithium, with funding application timelines of two years proposed in Namibia by the European Union. Lithium users in China, he says, are among those showing interest in an offtake agreement with AfriTin, though it remains too early for the company to commit itself.
AfriTin shareholders include Canaccord Genuity Wealth, Naminco, Fidelity Worldwide Investment and Hargreaves Lansdown. The company raised $22.8m in September selling new shares. It has a 4.5m pound lending facility from Standard Bank which has been drawn down for plant expansion, and is currently seeking to close further proposed investments from by Orion Resource Partners and the Development Bank of Namibia.
- The company reported its first annual profit of 400,000 pounds for the year to February 28. Viljoen aims to be producing lithium at Uis in the first or second quarter of 2023.
- The Uis project, he says, has the potential to become one of the world’s top four tin mines and one of the top five for lithium.
- Viljoen says the company is considering changing its name from AfriTin to make it “more all-encompassing.”
The coming scramble for lithium leaves African governments in the driving seat to exploit the resources for wider economic development.
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