Restrictions on cobalt and lithium: a shock for the automotive and battery industry, in the face of Chinese investments in Africa.
Restrictions on metals for batteries are reshuffling the cards of the global automotive industry. In Africa, several resource-rich countries 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 development directly impacts the value chain of electric vehicles, from material refining to automobile manufacturing.
Massive investments to secure batteries
For over a decade, Chinese mining companies have invested billions of dollars in Africa 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 in certain producing 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 the battery cells used in electric vehicles.
This industrial strategy aimed to supply Chinese refineries and factories, in a context of rapid growth in the electric automobile market. Car manufacturers heavily rely on these materials to produce high-performance batteries, improve vehicle autonomy, and meet the requirements of the energy transition.
Restrictions that disrupt the automotive chain
However, the dynamics changed with the implementation of stricter policies by African countries. Since February 2025, the Democratic Republic of Congo has imposed restrictions on cobalt exports to limit overproduction and capture more value locally. In Zimbabwe, a ban on exporting lithium concentrates was introduced to encourage local refining.
These measures immediately led to a significant increase in metal prices. Cobalt and its derivatives, such as cobalt hydroxide, experienced dramatic price hikes, while lithium is approaching record levels seen in 2023. For the automotive industry, this increase in raw material prices translates to higher battery production costs, and potentially electric vehicle costs.
The consequences are manifold for industry players. Chinese miners, who now produce more cobalt than they can export, find themselves with underutilized capacities. At the same time, battery manufacturers and car makers are facing supply chain tensions, exacerbated by a significant decrease in imports from Congo.
Towards nationalism of strategic resources
These political decisions reflect a deeper trend: the strengthening of natural resource sovereignty. African countries are now looking to develop local value chains, particularly by investing in refining and processing capacities. The goal is clear: capture a larger share of the added value related to the battery industry and, indirectly, to the automotive industry.
However, this transition is not without challenges. In Zimbabwe, lithium processing facilities are insufficient to absorb the entire production. Ongoing projects are expected to process only a fraction of the anticipated volumes, creating a gap between mining production and industrial capacities.
For Chinese investors, a dilemma arises: continue investing to develop local refining or redirect their activities to other regions. This uncertainty complicates industrial and financial planning, while increasing market volatility for metals.
In this context, the battery supply chain, essential to the global automotive industry, becomes more fragile. Geopolitical tensions around critical resources intensify, particularly with other powers increasingly seeking to reduce their dependence on supplies dominated by China.
Our opinion, by leblogauto.com
The African restrictions mark a significant turning point for the battery industry and, by extension, for the electric automotive industry. By seeking to capture more local value, producing countries are deeply altering the supply chain dynamics. In the short term, these measures generate tensions on prices and available volumes. In the long term, they could accelerate the partial relocation of refining and reshape the industrial geography of the sector.
Credit illustration: miningdigital.
