On 29 July, Australian lithium producer Liontown released its quarterly report for the period ended 30 June 2026. The Kathleen Valley lithium project produced 103.1 kdmt of spodumene concentrate during the June quarter, up 7% QoQ, while sales increased 29.3% QoQ to 108.5 kdmt. Average shipped grade was 5.0% Li₂O, while the average realised price was US$1,880/dmt on an SC6e, CIF basis. For FY26, Kathleen Valley produced 392.0 kdmt of spodumene concentrate, within the company’s previous guidance range of 365–450 kdmt. Liontown issued a clarification on the same day to amend the units of reference used in its FY26 results and FY27 guidance, removing the previous references to SC6 from concentrate production and cost metrics. Accordingly, concentrate production is reported on an actual dry metric tonne basis, unit operating costs are calculated per dry metric tonne sold, while average realised prices continue to be reported on an SC6-equivalent basis. Kathleen Valley has gradually moved beyond the initial question of whether it can achieve stable production and is now entering the underground mining ramp-up phase. More importantly for the lithium market, however, the key signal from this quarter is not the amount of additional concentrate Liontown will produce in FY27. Rather, the previous recovery in lithium prices has strengthened Liontown’s cash flow and balance sheet sufficiently to support renewed investment in underground development and expansion. Supply elasticity is therefore showing up first in capital expenditure rather than in near-term tonnes. US$1,880/dmt Marks a Quarterly High for Liontown, but Remains Below the 2026 Market Average Liontown achieved an average realised price of US$1,880/dmt on an SC6e, CIF basis during the June quarter, only 1.9% higher than US$1,845/dmt in the previous quarter. From Liontown’s own pricing history, this represented the highest quarterly realised price in FY26. Kathleen Valley’s average realised prices across the four quarters of FY26 were US$691/dmt, US$985/dmt, US$1,845/dmt and US$1,880/dmt, respectively, with a full-year average of US$1,379/dmt. However, viewed against the broader spodumene market in 2026, US$1,880/dmt is not particularly high. Compared with SMM’s year-to-date average for SC6 CIF China, Liontown’s realised price during the quarter remained at a discount to the broader market average. This suggests that Liontown has not fully captured the magnitude of the increase previously seen in spot spodumene prices. Table 1. Kathleen Valley FY26 Production, Sales and Pricing Metric Q1 FY26 Q2 FY26 Q3 FY26 Q4 FY26 Spodumene concentrate production (dmt) 87,172 105,342 96,367 103,111 Spodumene concentrate sales (dmt) 77,474 112,122 83,912 108,489 Average shipped grade 5.00% 5.10% 5.10% 5.00% Average realised price (US$/dmt, SC6e) 691 985 1,845 1,880 Source: Liontown. One important explanation lies in the pricing mechanism of Liontown’s offtake agreements. The company stated that customer receipts during the quarter benefited from stronger lithium indices and offtake agreements with lagged quotation periods, meaning that some contract prices are determined using benchmark prices from earlier periods. Liontown’s realised price therefore does not immediately track the contemporaneous spot market. Instead, benchmark prices are transmitted into realised prices with a time lag through contractual pricing formulas. During a rising market, this mechanism can leave realised prices below spot prices. Conversely, when spot prices fall, the same lag can temporarily support realised prices above prevailing market levels. For earnings analysis, US$1,880/dmt should therefore not simply be interpreted as Liontown’s current market selling price. The more relevant indicator is the evolution of Liontown’s realised-price discount or premium relative to the SMM SC6 CIF China benchmark. In other words, Liontown generated the current improvement in cash flow even though its realised price remained below the 2026 market average. This suggests that Kathleen Valley has already developed relatively strong cash-generation capability under the current pricing environment. Prices Have Moved Through the Income Statement and Are Now Feeding into Capex Liontown generated A$235 million in revenue during the June quarter, with operating cash flow reaching A$180 million. Net cash increased by A$137 million during the quarter, taking the company’s cash balance from A$424 million at the end of March to A$561 million at the end of June. At the end of FY25, Liontown held only A$156 million in cash. Its cash balance has therefore increased by more than threefold over FY26. Management has also explicitly changed the language around capital allocation. Six months ago, the company’s capital discipline was primarily focused on strengthening the balance sheet. It has now shifted towards pursuing value-accretive growth. This represents the key capital-cycle signal in the quarterly report: Higher lithium prices → improved realised prices → stronger cash flow → balance-sheet repair → renewed underground development and expansion capex. Liontown has now moved into the latter part of this transmission chain. FY27 Production Increases by Only ~23 kt, While Capex Rises to Nearly Three Times FY26 Levels Based on Liontown’s clarified reporting basis, the company produced 392 kdmt of spodumene concentrate in FY26, with FOB unit operating costs of A$987/dmt sold, AISC of A$1,233/dmt, and total capital expenditure of A$114 million. For FY27, Liontown is guiding to spodumene concentrate production of 390–440 kdmt, FOB unit operating costs of A$1,050–1,250/dmt sold, and total capital expenditure of A$320–370 million. Table 2. Liontown FY26 Actuals vs FY27 Guidance Metric FY26 Actual FY27 Guidance Change at Midpoint Spodumene concentrate production (kdmt) 392 390–440 0.059 FOB unit operating cost (A$/dmt sold) 987 1,050–1,250 0.165 AISC (A$/dmt) 1,233 — — Total capital expenditure (A$m) 114 320–370 ~+203% Source: Liontown clarification dated 29 July. At the midpoint of FY27 production guidance, Kathleen Valley would produce approximately 415 kdmt, only around 23 kdmt more than FY26, representing growth of roughly 5.9%. By contrast, the midpoint of FY27 capex guidance is A$345 million, approximately three times FY26 expenditure. FY27 should therefore not simply be characterised as a year of production growth. A more accurate interpretation is: FY27 is a transition year in which production growth remains limited while substantial capital is deployed ahead of future capacity growth. This also illustrates the time lag between the recovery in lithium prices and the eventual supply response. Investment is responding first; additional physical tonnes will follow later. Why Are Unit Costs Rising from A$987/dmt to A$1,050–1,250/dmt? The increase in FY27 cost guidance is another important variable in the report. FY26 FOB unit operating costs averaged A$987/dmt sold, while FY27 guidance rises to A$1,050–1,250/dmt sold. At the midpoint of A$1,150/dmt, this represents an increase of approximately 16.5%. This should not automatically be interpreted as evidence that underground mining is structurally more expensive. Liontown has not provided a quantitative breakdown of the factors driving the FY27 unit-cost increase, but the report identifies several relevant factors. First, logistics costs have increased. June-quarter unit operating costs rose from A$981/dmt sold to A$995/dmt sold, with Liontown attributing the increase primarily to higher diesel prices resulting from conflict in the Middle East, which increased transportation costs. Second, underground mine development expenditure is increasing. Q4 FY26 AISC rose from A$1,251/dmt sold to A$1,314/dmt sold, mainly because underground mine development costs began to be recognised as sustaining capital following the declaration of commercial production. Third, FY27 production guidance incorporates both scheduled maintenance and additional downtime required to connect expansion infrastructure with the existing processing system. This downtime has an important secondary effect: even if absolute fixed costs remain unchanged, lower saleable volumes mechanically increase costs on an A$/dmt sold basis. The increase in FY27 costs therefore appears to reflect a combination of: higher energy and logistics costs + increased underground development expenditure + fixed-cost dilution associated with planned downtime. These drivers have different degrees of persistence. If underground operations stabilise, recoveries improve and expansion-related downtime declines, some of the FY27 cost pressure could unwind. However, if underground mining itself carries materially higher unit mining costs, Kathleen Valley’s long-term cost base could shift structurally higher. Further FY27 operating data will be required to distinguish between these two outcomes. At this stage, there is insufficient evidence to treat the A$1,050–1,250/dmt FY27 range as Kathleen Valley’s new long-term normalised cost level. Underground Ore Mined Falls 12%, While Development Metres Rise 35% Kathleen Valley’s mining data also display characteristics typical of an underground mine in ramp-up. Underground ore mined during the June quarter fell 12% QoQ to 356 kt. However, underground development increased 35% QoQ to a record 3,316 metres. This suggests that Liontown is not simply maximising near-term ore extraction. Instead, it is developing additional underground headings and mining areas to support higher future mining rates. The company plans to maintain an underground mining run rate of approximately 1.5 Mtpa in Q1 FY27, before beginning the next stage of the ramp-up in Q2 FY27, with a target of reaching a 2.8 Mtpa annualised mining run rate by the end of FY27. Processing recovery represents a second potential source of production growth. Kathleen Valley processed 647 kt of ore during the June quarter at an average feed grade of 1.3% Li₂O, while lithium recovery improved from 61% to 63%. Underground ore accounted for 55% of plant feed. Liontown stated that when the plant processes sustained campaigns of cleaner underground ore, lithium recoveries can consistently reach approximately 70%. Future concentrate production therefore depends on two separate variables: Mining rate determines how much ore is available; recovery determines how much concentrate can be produced from that ore. If underground mining rates and plant recoveries improve simultaneously, Kathleen Valley could benefit from both higher ore availability and better conversion into concentrate. Conversely, even if the 2.8 Mtpa annualised mining-rate target is achieved, sustained recovery of only around 63% would result in lower concentrate production than the theoretical mining capacity might otherwise imply. FY27 Guidance Should Not Be Treated as 100% Certain Supply For a project still ramping up underground operations, company guidance should not be treated as guaranteed supply. Based on Kathleen Valley’s current operating position, SMM applies the following scenario framework to FY27 concentrate production: Table 3. Kathleen Valley FY27 Production Scenarios Scenario Key Assumptions FY27 Concentrate Production Probability Bull Underground development progresses to plan; recovery approaches 68–70%; limited impact from planned downtime 430–440 kdmt 20% Base Underground ramp-up broadly on schedule; 2.8 Mtpa run rate reached mainly toward FY27-end; recovery at 63–66% 400–420 kdmt 60% Bear Development, equipment utilisation or recovery underperforms; downtime exceeds expectations 370–390 kdmt 20% The 20%/60%/20% probabilities represent SMM’s analytical risk-weighting assumptions based on the project’s current stage, rather than Liontown guidance or statistically derived historical probabilities. Under this framework, probability-weighted FY27 concentrate production would be approximately 410 kdmt, slightly below the 415 kdmt midpoint of company guidance. These probabilities can be updated as Liontown reports Q1 FY27 underground development, ore mined, recovery rates and actual downtime. FY27 Underground Ramp-Up and the Expansion FID Need to Be Analysed Separately One important distinction is that Liontown’s FY27 production guidance of 390–440 kdmt does not represent post-expansion production. The company has explicitly stated that its FY27 guidance assumes no final investment decision has yet been made on the Kathleen Valley Expansion. The current A$320–370 million capex guidance includes the remaining early works announced in April, but excludes additional expansion capital expenditure that would follow a positive FID. The two sources of future supply therefore require different risk adjustments: FY27: discount for underground ramp-up and operational execution risk. FY28 onward: apply additional discounts for FID, capital requirements, construction schedule, plant integration and ramp-up risk. Liontown has already commenced early works and long-lead procurement ahead of the formal FID, including the purchase of a 5.5 MW ball mill designed to increase processing capacity and improve grinding control and recovery. A formal FID is expected by the end of Q1 FY27. The expansion has therefore moved beyond the stage of being merely an announced project. However, this does not mean that the expansion’s full incremental capacity should automatically be included in the FY28 supply balance. FID does not equal on-time commissioning, and on-time commissioning does not equal immediate achievement of nameplate capacity. Kathleen Valley’s ~23 kt FY27 Increment Is Small in the Context of Australian Spodumene Supply At the midpoint of guidance, Kathleen Valley would add only around 23 kt of spodumene concentrate in FY27 compared with FY26. Using standard industry SC6 conversion assumptions, this represents only several thousand tonnes of LCE, making it a marginal addition to a global lithium market measured in millions of tonnes of LCE. The scale becomes clearer when compared with other established Australian assets. Following completion of P1000, PLS’s Pilgangoora operation has reached nominal spodumene concentrate capacity of approximately 1 Mtpa. PLS has also approved the restart of the approximately 200 ktpa Ngungaju processing plant in 2026. Meanwhile, Wesfarmers and SQM have recently approved A$1.45 billion of investment to expand Mt Holland, targeting an increase in spodumene concentrate capacity from approximately 380 ktpa to 760 ktpa, although first incremental production is not expected until around 2030. Liontown’s quarterly report therefore does not materially change the FY27 global spodumene supply balance. Its broader significance lies elsewhere: Kathleen Valley provides a clear example of how improving lithium economics are beginning to reactivate capital expenditure across established Australian assets. What the market is currently seeing is therefore a leading indicator of future supply elasticity, rather than the supply itself. SMM View: Liontown Is Signalling That Capital Is Returning Before Supply Does Liontown’s quarterly report has limited direct implications for the near-term spodumene supply-demand balance. The midpoint of FY27 concentrate production guidance is only around 23 kt above FY26 actual production. Even if fully achieved, this would not represent a material addition to global lithium supply. The more significant change is in capital deployment. Liontown ended FY26 with A$561 million of cash, while FY27 capital expenditure guidance has increased from A$114 million in FY26 to A$320–370 million. The company is increasing underground development, procuring expansion equipment ahead of FID and targeting an Expansion FID around the end of September. Kathleen Valley therefore illustrates a four-stage supply response: Higher prices → stronger cash flow → capex recovery → incremental production. Liontown is currently moving from the second stage into the third. The quarterly report therefore cannot be reduced to a simple narrative of “higher lithium prices → Liontown increases production → supply pressure rises.” The actual FY27 volume increase is limited, while the supply associated with today’s capital expenditure will predominantly emerge from FY28 onward. For the global lithium market, the more important question is whether the same pattern is beginning to emerge simultaneously across high-quality Australian brownfield assets. Pilgangoora has completed P1000 and is restarting Ngungaju; Mt Holland has approved A$1.45 billion of expansion investment; and other Australian assets, including Mt Marion, are also seeing renewed capital deployment. If improving lithium economics continue to reactivate expansion spending across existing mines, medium-term supply elasticity could prove materially greater than suggested by looking only at incremental production over the next 12 months. For Liontown itself, the next event that matters more than another ordinary quarterly production number will be the Kathleen Valley Expansion FID expected around the end of September. At that point, the key variables for the supply model will not simply be whether the project is expanded, but the targeted capacity, capital intensity, construction schedule and ramp-up timeline. Those four variables will ultimately determine when the capital being deployed today becomes physical spodumene concentrate entering the market. SMM New Energy Analyst Lesley Yang yangle@smm.cn

On July 27, Rock Tech Lithium announced that it had entered into a binding long-term spodumene concentrate offtake agreement with commodity trading company Transamine SA for its Georgia Lake lithium project in Ontario, Canada. Under the agreement, Transamine will purchase spodumene concentrate produced from Georgia Lake starting in 2028. The initial term is seven years, with the option to extend the agreement annually for up to an additional five years by mutual consent. Meanwhile, Transamine intends to provide up to US$80 million in development prepayment financing to support the construction and financing of the Georgia Lake project. In terms of offtake volumes, the agreement provides for a base purchase volume of 50,000 dry metric tonnes in the first delivery year, increasing to 100,000 dry metric tonnes per year thereafter, with Rock Tech retaining a ±10% volume adjustment option. Based on the company’s current development plan, the agreement could in principle cover the majority of Georgia Lake’s planned spodumene concentrate production. However, final offtake volumes and delivery schedules remain subject to the results of the feasibility study currently underway. As such, the supply profile specified in the agreement should not yet be treated as equivalent to the project’s eventual production profile. In terms of pricing, the agreement adopts a floating pricing mechanism linked to the 6% Li₂O spodumene concentrate CIF China price published by third-party pricing platforms, with adjustments based on the actual Li₂O grade of delivered products. The parties have also agreed on a conditional price floor mechanism, although the specific floor price has not been disclosed. The mechanism is subject to factors including the resale market, inflation adjustments and project financing conditions. SMM believes that although Georgia Lake is positioned as part of a North American domestic lithium supply chain, the long-term offtake agreement continues to use the China CIF spodumene concentrate price as its core pricing benchmark. This reflects the continued importance of the Chinese market as a key source of price discovery and a pricing reference for international long-term lithium concentrate contracts under the current global spodumene trading system. In addition to the long-term offtake arrangement, another key component of the agreement is Transamine’s proposed development prepayment financing of up to US$80 million. According to the disclosure, the financing will bear interest at three-month CME Term SOFR plus 2.95%, with interest accruing quarterly. Once the project enters production and concentrate deliveries begin, the prepayment is expected to be repaid within 24 months following the first delivery through deductions from spodumene concentrate sales proceeds. Any outstanding balance after the 24-month period would be repayable in cash. It is worth noting that the proposed financing of up to US$80 million remains subject to a number of conditions precedent and does not mean that Rock Tech has already secured the full amount. Conditions for drawdown include the completion of the required equity financing for Georgia Lake, receipt of key permits and land rights, satisfactory completion of legal, financial and technical due diligence by Transamine, and successful product quality and metallurgical testing. The final financing amount and detailed terms will also be determined following further progress on the project’s feasibility study. From a project development perspective, the agreement therefore improves financing visibility for Georgia Lake, but the completion of equity financing, permitting and a final investment decision will remain key variables determining whether the project can achieve its targeted 2028 start-up. Another notable feature of the offtake structure is that Rock Tech retains the option to redirect Georgia Lake spodumene concentrate to its own downstream conversion facilities in the future. Under the agreement, if Rock Tech’s planned Red Rock lithium conversion project requires feedstock from Georgia Lake, the existing spodumene concentrate offtake arrangement may be converted into an offtake agreement for battery-grade lithium hydroxide or lithium carbonate. The parties would subsequently agree on product specifications, conversion mechanisms, pricing and delivery arrangements, while Transamine’s corresponding take-or-pay obligations are expected to remain in place. This structure allows Rock Tech to secure a long-term sales channel and enhance the bankability of the mine at the current development stage without fully locking in the future destination of Georgia Lake’s feedstock. If Red Rock is successfully developed, the company could redirect part or all of the concentrate to domestic lithium conversion in Canada while extending Transamine’s purchasing obligations from spodumene concentrate to battery-grade lithium chemicals. This would preserve Rock Tech’s ability to capture additional value further downstream in the lithium value chain. Georgia Lake is located near Thunder Bay, Ontario, Canada, and is 100%-owned by Rock Tech. The project represents a key upstream component of the company’s strategy to establish a domestic North American lithium supply chain. Under the current development schedule, Rock Tech targets the commencement of commercial production in 2028. However, the project remains in the development stage and must still complete several major milestones, including the feasibility study, permitting, equity and debt financing, construction and production ramp-up. Therefore, in global lithium supply forecasts, SMM believes Georgia Lake is currently more appropriately treated as a potential post-2028 supply addition with improving development visibility but still requiring a meaningful risk adjustment. SMM believes that the agreement between Rock Tech and Transamine is more than a conventional spodumene concentrate sales contract. By combining long-term offtake, take-or-pay obligations, a price protection mechanism and development prepayment financing, the structure could improve the predictability of Georgia Lake’s future cash flows and enhance the project’s overall bankability at a time when lithium prices remain volatile and financing conditions for new North American lithium projects remain challenging. At the same time, Rock Tech’s option to convert the spodumene concentrate offtake into a lithium chemicals offtake provides significant flexibility for the company’s future integrated “mine-to-lithium chemicals” strategy in Canada. From a broader market perspective, financing structures for new overseas lithium resource projects have increasingly shifted from reliance solely on equity and conventional project finance toward models combining long-term offtake, prepayment financing and strategic partnerships. Following the sharp correction in lithium prices, project developers increasingly need to secure long-term customers, establish downside price protection mechanisms or introduce prepayment financing to improve project bankability. The Rock Tech transaction is another example of this trend. Going forward, the market should closely monitor the results of the Georgia Lake feasibility study, project capital expenditure, progress on equity financing, the actual amount drawn under the proposed US$80 million prepayment facility, and whether the project can achieve commercial production in 2028 as currently planned. SMM New Energy Analyst Lesley Yang yangle@smm.cn

According to foreign media reports, recently, the state-owned enterprise Mutapa Energy Resources of Zimbabwe announced that its Sandawana lithium mine project confirmed 39.9 million mt of JORC-compliant lithium resources, of which 28.7 million mt are measured resources, accounting for about 72% of the total. It is reported that the resources confirmed at the Sandawana lithium mine project this time cover only about 30% of the approximately 3,800-hectare mining right area. The first phase of exploration for the project lasted 11 months, completed 103,000 meters of drilling and 33,000 sample analyses, with a cumulative investment of $24 million.

The first half of 2026 is already in the past. At the start of H2, industry chain enterprises have begun to release their H1 2026 performance forecasts collectively. Notably, against the backdrop of a significantly higher YoY lithium price center, stable demand in the NEV industry, and a continuously booming energy storage sector, most enterprises in the lithium industry chain expect varying degrees of performance improvement. SMM has compiled the performance forecast situations of some enterprises in the industry chain, as follows:

On 22 July 2026, Zimbabwe’s state-owned Mutapa Energy Resources released the JORC-compliant resource estimate for the Sandawana lithium project: Block A totals 39.9 million tonnes at 1.39% Li₂O, with an exceptional 72% classified as Measured. Block A accounts for only 30% of the lease area; the remaining 70% remains unexplored, and the company targets upgrading the total resource to 90 million tonnes. The Zimbabwean government has banned concentrate exports effective 1 January 2027 with no extension granted, forcing miners to accelerate local processing. Sandawana’s processing plan is still at the feasibility stage, lagging behind peers such as Huayou Cobalt (already in production), Sinomine and Yahua (under construction). Chinese capital is deeply involved: Huayou and Tsingshan are building a US$270 million concentrator under a BOT model, while Mutapa has secured an additional US$300 million in funding (including Chinese investors). SMM believes the high Measured proportion gives the project strong “bankability”, but the mismatch between resources and processing capacity, combined with the export ban countdown, makes the next six months decisive for the project’s success. I. JORC Resource: Nearly 40 Mt with 72% Measured On 22 July 2026, Zimbabwe’s state-owned lithium enterprise, Mutapa Energy Resources (MER), officially released the JORC (Joint Ore Reserves Committee)-compliant resource estimate for the Sandawana lithium mine. The report shows that Block A contains a total mineral resource of 39.9 million tonnes at an average grade of 1.39% Li₂O – of which Measured Resource is approximately 28.6 million tonnes, accounting for 72% ; Indicated Resource is 2.7 million tonnes (6.8%); and Inferred Resource is 8.5 million tonnes (21.3%). This proportion of Measured Resource is extremely rare in Zimbabwe’s mining industry. At the Harare press conference, Mutapa Energy CEO Innocent Rukweza stated: “To our knowledge, we are the first mine in Zimbabwe with a Measured Resource representing 72% of the total resource. Most mines are far below this level, while we have exceeded 50%, which makes the resource ‘bankable’.” Even more noteworthy is that this 39.9 million tonnes resource is derived only from Block A, which covers just 30% of the entire 3,800-hectare mining lease. Blocks B and C – together accounting for 70% of the lease area – remain largely unexplored. Rukweza made it clear that the company aims to increase the total resource from the current nearly 40 million tonnes to 90 million tonnes . To achieve the above exploration results, Mutapa Energy completed 103,000 metres of drilling and collected and tested 33,000 samples over the past 11 months, at a total cost of US$24 million . The company has already mined approximately 2 million tonnes of ore from Sandawana and is constructing a concentrator with an annual processing capacity of 3 million tonnes . II. From Abandoned Emerald Mine to National Lithium Strategic Pillar Sandawana is not a greenfield project. Its mining history dates back to 1955 , when it was renowned for high-quality emerald (green beryl) production and operated for about 40 years. In 2010, operations were suspended due to working capital shortages and depletion of emerald resources. The mine’s “second life” began with Zimbabwe’s national strategic shift. As the global energy transition accelerated, lithium rose from a niche mineral to “white petroleum”. The Zimbabwean government incorporated lithium development into its national strategy, and Sandawana was repositioned as a lithium and tantalum project, placed under Mutapa Energy Resources, which is owned by the Mutapa Investment Fund. In 2025 , the former operating entity Kuvimba Mining House announced a US$270 million investment to build a lithium concentrator at Sandawana, with construction planned to start in the third quarter of 2025 and commissioning targeted for early 2027. In February 2026 , the Mutapa Investment Fund restructured Kuvimba into several specialised entities, and Mutapa Energy Minerals formally took over Sandawana, with Innocent Rukweza appointed as CEO. This restructuring marked Sandawana’s upgrade from a “legacy asset” to a flagship project of Zimbabwe’s national lithium strategy. III. Lithium Sulphate Strategy: A Chaser under Policy Pressure Sandawana’s processing roadmap is clear and urgent: concentrate → lithium sulphate → lithium carbonate . Zimbabwe’s government has progressively tightened lithium controls: in 2022 it banned unprocessed raw ore exports; in June 2025 it announced a ban on lithium concentrate exports effective 1 January 2027 ; in February 2026 it temporarily suspended all concentrate exports, later granting conditional soft relief via quotas while imposing an additional 10%–16% tax on concentrate exports and requiring written commitments from companies to build lithium sulphate plants before 2027. The government has explicitly ruled out any extension and will enforce the ban as scheduled. This policy imposes enormous time pressure on all lithium miners in Zimbabwe. In June 2026 , Rukweza, in his capacity as chairman of the Zimbabwe Lithium Producers’ Association, submitted an appeal to the government on behalf of the industry, requesting a postponement of the ban to March or June 2027 . In his remarks, he stated candidly: “We are not trying to avoid our beneficiation obligations; we are sincerely asking for time to complete the projects we have already started.” He revealed that among the seven major lithium producers, only Huayou Cobalt’s lithium sulphate plant has been completed, commissioned and has achieved product shipments ; Sinomine’s Bikita Minerals and Yahua’s Kamativi lithium mine are still under construction. Sandawana’s processing scheme, by contrast, remains at the feasibility study stage . In other words, Sandawana is far ahead on resources but a chaser on processing. The company has committed approximately US$1.45 billion to local processing facilities, but the time window is narrowing. IV. Chinese Capital: Deep Integration from Financing to Construction Long before the investment landed, Chinese companies were already deeply embedded in Sandawana’s development chain. In September 2024 , Zhejiang Huayou Cobalt and Tsingshan Holding Group reached a cooperation agreement with Zimbabwe’s state-owned Kuvimba Mining House (the predecessor of Mutapa Energy Resources). Under the agreement, the Chinese partners do not hold direct equity in Sandawana, but participate under a BOT (Build-Operate-Transfer) model – the partners will operate the processing plant for at least 5 years after commissioning, during which they will recover construction costs and earn operating profits, after which all assets and titles will be transferred to the Zimbabwean state free of charge . In February 2026 , Mutapa Energy Resources CEO Rukweza officially confirmed that the Sandawana concentrator would be built in cooperation with Huayou Cobalt and Tsingshan under this BOT framework. The facility involves an investment of US$270 million , with an annual processing capacity of 600,000 tonnes of ore, targeting commissioning in early 2027. Dinson Holdings , as Tsingshan’s core investment platform in Zimbabwe, though not directly involved in the Sandawana project cooperation, operates an ore processing facility with an annual capacity of 1 million tonnes through its subsidiary Gwanda Lithium . Before Sandawana’s own concentrator is completed, some ore from Sandawana has been shipped to Gwanda for processing. Dinson has accumulated total investments of approximately US$900 million in Zimbabwe, covering ferrochrome smelting, coke, steel and lithium processing, forming a critical pillar for Tsingshan’s lithium operations in the country. In addition, Sinomine Resource Group, Chengxin Lithium Group and Sichuan Yahua Industrial Group are among the Chinese companies that have invested in Zimbabwe’s lithium sector. Chinese capital’s presence in Zimbabwe’s lithium industry has extended from pure investment to full-chain cooperation covering technology, engineering, construction and off-take agreements. SMM Perspectives The release of Sandawana’s JORC resource has landmark significance on three levels: First, the “certainty” value of resource quality. A Measured Resource proportion of 72% is exceptionally rare in African mining projects. This means geological risk has been substantially compressed, giving the project clear “bankability”. Against the backdrop of global lithium prices falling from their 2022 peak of approximately US$86,000/tonne to the current level of about US$14,000/tonne, capital is placing a higher premium on “certainty” – Sandawana’s high Measured proportion precisely meets that demand. Second, the urgency of the time window. The 1 January 2027 concentrate export ban is now on a countdown. Sandawana’s resource is “in place”, but its processing capacity remains at the “feasibility study” stage. Huayou Cobalt is already in production, while Sinomine and Yahua are under construction – Sandawana clearly lags behind its peers on the processing front. Whether the US$300 million funding can translate into rapid processing facility construction will determine whether this “Zimbabwe’s largest undeveloped lithium asset” can complete its value realisation before the ban takes effect. Third, the game of Zimbabwe’s “resource nationalism”. From the 2022 raw ore ban to the 2027 concentrate ban, Zimbabwe is advancing along a clear path: “ban raw ore → restrict concentrate → mandate lithium sulphate”. The objective is clear: to keep higher value-added links of the lithium value chain within the country. But for Sandawana, this means a stark choice between “selling concentrate” and “building a lithium sulphate plant” – and time is not on its side. Sandawana possesses Zimbabwe’s highest-quality lithium resource endowment and carries the nation’s ambition to transform from a resource exporter into a battery materials producer. But whether the “quality” of its resources can translate into the “quantity” of processing capacity depends on a three-way race among capital, technology and policy. The US$300 million has arrived, the US$270 million concentrator is under construction, but the feasibility study for the lithium sulphate plant has only just begun. When the clock strikes January 2027, will Sandawana be an “exemption” or a “restricted party” under the concentrate export ban? The answer will be revealed in the next six months. Sources: Mutapa Energy Resources, SMM, publicly available information

In the first half of 2026, the price trends of the three major black mass categories diverged significantly. LFP black mass was highly correlated with the spot and futures prices of lithium carbonate. Ternary battery powder, supported by the multi-metal value of nickel, cobalt, and lithium, exhibited a "high-then-low, wide-range oscillation" pattern.

On July 22, Wesfarmers and SQM formally approved the expansion of the Mt Holland lithium project. The project will construct a second beneficiation plant and an ore pre-selection facility, increasing the nominal capacity of lithium concentrates from approximately 380,000 mt/year to 760,000 mt/year.

[SMM Analysis: New Battery Consumption Tax Policy Takes Effect: Sodium-Ion Batteries Exempt, Lithium Batteries Taxed, Sodium-Ion Batteries Enter a "Tax Exemption Dividend Period"] SMM, July 21: The Ministry of Finance, the General Administration of Customs, and the State Taxation Administration recently jointly issued an announcement on the adjustment of the battery consumption tax policy. For the first time, lithium-ion batteries and similar products are included in the scope of consumption tax collection, while sodium-ion batteries, solid-state batteries, fuel cells, and others are listed in the exemption catalog. This "tax-and-exempt" design has garnered widespread attention across the sodium-ion battery industry chain...

This week, spot lithium carbonate prices continued to drift lower, with the price center moving further down to around the 150,000 yuan/mt level. The futures market consolidated on a subdued note, with the most-traded 2609 contract fluctuating from an initial range of 147,800-153,600 yuan/mt early in the week to 145,900-152,500 yuan/mt, hitting a mid-week low of 145,900 yuan/mt—a fresh recent low. Open interest first declined then rose, as the tug-of-war between longs and shorts persisted. Market trading showed a standoff pattern of “downstream dip-buying while upstream held back from selling,” with actual transactions relatively active. Upstream lithium chemical plants showed extremely low willingness to sell amid the rapid price decline, with sentiment toward holding back from selling intensifying. Some spot order quotes were still maintained above 160,000 yuan/mt, as a clear intent to hold prices firm emerged. Downstream material plants showed fairly active buying sentiment below 150,000 yuan/mt, but large-scale concentrated restocking had yet to appear, and purchasing behavior remained cautious, mainly driven by rigid demand. Overall, market inquiries and actual transactions continued to be relatively active, but the psychological price gap between upstream and downstream persisted. On the supply side, production kept falling, and inventory differentiation across the industry chain continued. Lithium carbonate production declined further this week, mainly due to some lithium chemical plants entering maintenance as planned, leading to a noticeable reduction in spodumene-based output. From the perspective of inventory changes: upstream lithium chemical plants saw slight in-factory inventory buildup due to extremely low willingness to sell and holding back from selling; downstream material plants’ purchase willingness recovered somewhat WoW, but purchasing was cautious due to the still-rapid downward trajectory of prices, resulting in a modest overall inventory buildup; trader inventories destocked more significantly, as downstream procurement improved marginally, compounded by plants’ holding back from selling and traders’ own capital pressures. Looking ahead, short-term lithium carbonate prices may continue to consolidate on a subdued note, but downside below 150,000 yuan/mt is limited. On the supply side, ongoing maintenance at some lithium chemical plants and shrinking production are providing some floor support to prices. However, on the demand side, downstream purchases remain cautious and rigid-demand-oriented, lacking a large-scale concentrated restocking driver, so prices lack upward momentum. The core contradiction in the current market is: below 150,000 yuan/mt, downstream purchase willingness strengthens, providing a floor for prices; but upstream holding prices firm and holding back from selling coexists with cautious downstream buying, leaving prices lacking sustained rebound momentum. It is expected that lithium prices will consolidate in the range of 145,000-160,000 yuan/mt in the near term. It is recommended to focus on the defense of the psychological 150,000 yuan/mt level, changes in downstream restocking pace, and the progress of maintenance recovery at lithium chemical plants.

[SMM Lithium Battery] Soochow Securities research report noted that Ganfeng Lithium (002460.SZ) delivered results in line with our expectations, with the rise in lithium prices contributing to earnings flexibility.