Goldman Sachs: Zimbabwe's lithium mine export ban is unlikely to be lifted soon, and lithium prices will "undoubtedly" reach new highs!

Zimbabwe unexpectedly announced a complete suspension of lithium concentrate and unprocessed mineral exports, a policy shift that is rapidly reshaping global lithium market supply and demand expectations and price trends. Goldman Sachs analyst James McGeoch stated, against the backdrop of tightening fundamentals, this shock will undoubtedly drive lithium prices to new highs. The threat of supply disruption quickly triggered a strong reaction in the market. Following this news, domestic lithium carbonate futures surged by 14%. Zimbabwe's export shock is not only a significant stress test for the global supply chain but also directly ignited Wall Street's trading enthusiasm for related assets. Policy Shift Impacts Global Supply Chain Zimbabwe's Minister of Mines Polite Kambamura announced that in order to force mining companies to conduct substantial processing locally, the export ban is effective immediately until further notice, and this ban even covers goods that are currently in transit. Zimbabwe is one of the countries in Africa with the largest lithium reserves and is also a top lithium producer globally. The country's supply dynamics have a significant impact on the global market, especially in China. The latest data from the U.S. Geological Survey (USGS) indicates that Zimbabwe's lithium production in 2024 is expected to be about 22,000 tons, accounting for approximately 9.2% of the global reported total production of 240,000 tons. Goldman Sachs' forecast further highlights the strategic position of the country. Goldman Sachs originally expected Zimbabwe's lithium carbonate equivalent (LCE) production to reach 160,000 tons by 2026, accounting for about 10% of global supply outside of China. Goldman Sachs analyst James McGeoch pointed out in the report that Zimbabwe is an important marginal spodumene supplier, accounting for 8% of Goldman Sachs' global supply forecast for 2026. He emphasized that the ban may only be lifted when mining companies fully comply with the Zimbabwean government's localization processing requirements. McGeoch also mentioned similar intervention histories in Africa in recent years, such as the cobalt export ban implemented by the Democratic Republic of the Congo in February 2025, which eventually evolved into an export quota system by October of that year. Lithium Prices Surge, Market Trading Enthusiasm Rekindled Before the ban was announced in Zimbabwe, signs of tightening fundamentals were already evident in the global lithium market. After the Chinese New Year holiday, lithium prices on the Guangzhou Futures Exchange (GFEX) had already risen by 10%, indicating that prices had gained support prior to this sudden event. After the news of the export ban broke, market sentiment was instantly ignited. Domestic lithium carbonate futures prices surged by 14% shortly after the announcement. The Goldman Sachs team noted that recent lithium prices closed at 166,000 yuan, just 13% away from the 190,000 yuan high set in January of this year "The Chinese market has already been buying in before the news broke, and now we are all catching up," McGeoch said. "There is no doubt that we expect new highs here." He believes that the onshore lithium carbonate price at GFEX will continue to rise the next day. In addition to directly impacting commodity prices, Goldman Sachs also views this event as a clear trading opportunity. McGeoch advises investors to pay attention to the GSCBGLLI index and reveals that he is closely monitoring the small mining exploration company QTWO CN, which may benefit from this. He pointed out that the market itself already has the willingness to hold lithium assets, and this supply disruption will significantly amplify this trend.