The lithium industry in Africa’s top producer has rapidly expanded, buoyed by about $1 billion of investments during the past two years by Chinese companies including Zhejiang Huayou Cobalt (603799.SS), Sinomine Resource Group (002738.SZ), Chengxin Lithium Group (002240.SZ) and Yahua Group (002497.SZ).

The Chinese companies, faced with production constraints at home, have focused on Zimbabwe to lock-in future lithium supplies.

The investments could boost capacity to 192,000 tons of lithium carbonate equivalent (LCE) per year of petalite and spodumene in 2027, from 13,000 tons per year LCE in 2022, Cameron Hughes, a battery markets analyst at CRU said in a report.

“These investments will place Zimbabwe as the fifth largest primary producer of lithium by 2025, after Argentina, contributing more than either Canada or Brazil,” Hughes said.

While Zimbabwe holds some of the world’s biggest lithium deposits, the metal has only being mined at Bikita Minerals, producing petalite – a form of lithium used in ceramics, aluminium smelting and glass – since in the 1950s.

Sinomine paid $180 million for Bikita Minerals last year and has spent $300 million to expand the petalite and spodumene capacity to over 90,000 tons LCE per year from 6,000 tons LCE per year in 2020.

Investments by Sinomine and others mean Zimbabwe’s capacity could rise to about 11% of global LCE production in five years from just 2% in 2020, said Martin Jackson, head of battery raw materials at CRU.

Still, while the capacity is “significant”, full utilization would depend on lithium demand and prices, Jackson added.

“I doubted the speed of the ramp up of many of those operations but those Chinese investors have brought lithium to market much quicker than I ever expected,” he said.

Chinese manufacturers’ ability to blend petalite and spodumene concentrates into battery grade material has made the Zimbabwean deposits more attractive, Jackson said.

“One thing we know is there is more investment coming through, we know there is more Chinese interest.”

Despite the huge potential, softening prices might not support investments on marginal projects, Jackson added.

Raisi, who visited Kenya and Uganda earlier in the week, met with Zimbabwean President Emmerson Mnangagwa in Harare.

The 12 MOUs include plans to create a tractor manufacturing plant in Zimbabwe with an Iranian company and a local partner. The two countries also signed co-operation agreements for energy, agriculture, pharmaceuticals, and telecommunications as well as research, science and technology projects.

“We welcome investments in several sectors of our economy,” Mnangagwa told reporters after the signing ceremony. He did not say how much investment Zimbabwe was expecting from Iran.

Making reference to U.S sanctions imposed on Iran and Zimbabwe, Raisi said his country would work hard to forge closer economic ties.

Iran’s trade with Africa will increase to more than $2 billion this year, its foreign ministry said on Saturday, without providing a comparative figure for 2022.

Raisi’s African visit, the first by an Iranian leader since 2013, follows a visit in June to three Latin American countries also saddled with U.S. sanctions.