Restrictions on cobalt and lithium: a shock for the automotive sector and batteries, amid Chinese investments in Africa.
The restrictions on metals for batteries are reshuffling the deck of the global automotive industry. In Africa, several resource-rich states are tightening their export policies, putting pressure on Chinese mining groups that have heavily invested to secure their supply of essential raw materials for battery production. This evolution directly impacts the value chain of electric vehicles, from material refining to automotive manufacturing.
Massive investments to secure batteries
For over a decade, Chinese mining companies have invested billions of dollars on the African continent to ensure strategic access to critical metals like cobalt and lithium. These raw materials are essential for the production of lithium-ion batteries, at the core of electric and plug-in hybrid vehicles, as well as energy storage systems.
These investments have led to a rapid increase in production for certain producer countries. The Democratic Republic of Congo, the world’s leading cobalt supplier, has more than doubled its production in just three years. Meanwhile, Zimbabwe has become the fourth-largest lithium producer, a key component for battery cells used in electric vehicles.
This industrial strategy aimed to supply Chinese refineries and factories, in the context of rapid growth in the electric vehicle market. Automakers heavily rely on these materials to produce efficient batteries, improve vehicle range, and meet the requirements of energy transition.
Restrictions reshaping the automotive chain
The dynamic, however, has shifted with the implementation of stricter policies by African states. Since February 2025, the Democratic Republic of Congo has imposed restrictions on cobalt exports to curb overproduction and capture more value locally. In Zimbabwe, a ban on exporting lithium concentrates was introduced to promote local refining.
These measures immediately caused a significant increase in metal prices. Cobalt and its derivatives, like cobalt hydroxide, experienced dramatic increases, while lithium approached record levels seen in 2023. For the automotive industry, this raw material inflation results in higher battery production costs, and potentially electric vehicle costs.
The consequences are manifold for industry players. Chinese miners, now producing more cobalt than they can export, are left with underutilized capacities. At the same time, battery manufacturers and automakers are facing supply chain tensions exacerbated by a significant drop in imports from Congo.
Toward a nationalism of strategic resources
These political decisions reflect a trend towards strengthening natural resource sovereignty. African countries are now seeking to develop local value chains, including investing in refining and processing capacities. The goal is clear: capture a greater share of the value added in the battery industry and indirectly in the automotive sector.
However, this transition is not without challenges. In Zimbabwe, lithium processing infrastructure remains insufficient to absorb all production. Ongoing projects are expected to only process a fraction of the anticipated volumes, creating a gap between mining production and industrial capacities.
For Chinese investors, a dilemma arises: continue investments necessary to develop local refining or redirect activities to other regions. This uncertainty complicates industrial and financial planning, while heightening market metal volatility.
In this context, the battery supply chain, crucial to the global automotive industry, becomes more fragile. Geopolitical tensions around critical resources are intensifying, especially with other powers increasingly seeking to reduce their dependency on supplies dominated by China.
Our opinion, by leblogauto.com
African restrictions mark a turning point for the battery sector and, by extension, for the electric automotive industry. By aiming to capture more value locally, producer countries are profoundly changing the supply chain dynamics. In the short term, these measures generate price and availability tensions. In the long term, they could accelerate partial relocation of refining and reshape the industrial geography of the sector.
Illustration credit: miningdigital.
