Tinci Materials Announces $2 Billion Morocco Investment as Chinese Battery Firms Target North Africa

On the evening of June 11, publicly-listed Tinci Materials (002709.SZ) announced that the company and its wholly-owned subsidiary had recently signed an agreement with the Kingdom of Morocco. The deal involves establishing an integrated electrolyte and raw materials production facility in Morocco through a project company, with annual capacity of 150,000 tons of electrolyte products and key raw materials.

source: Tinci Materials

The Kingdom of Morocco will provide necessary support for the project under applicable regulations and offer corresponding subsidies when the project meets relevant conditions.

The announcement specified that the project will be implemented in the Jorf Lasfar industrial park in Jadida Province (Casablanca-Settat region), with total investment estimated at 25.76 billion Moroccan dirhams (approximately $2.01 billion).

Tinci Materials committed to achieving project commissioning and agreed production and export targets within five years of the agreement's effective date, and pledged to create the agreed number of stable employment positions in Morocco by 2028.

The Kingdom of Morocco, in turn, committed to providing the project company with all customs and tax benefits arising from industrial acceleration zone status under relevant laws and regulations, and to offer project subsidies based on applicable regulations, considering the actual total investment achieved by the project company and employment figures.

Tinci Materials stated that signing this investment agreement aims to establish long-term, stable strategic cooperation with the Moroccan government, fully integrate advantageous resources, further improve the company's overseas footprint, and advance its globalization strategy.

Weike Lithium Battery Network noted that Morocco is becoming a hotbed for Chinese lithium battery company investments. For instance, in May, Gotion High-Tech's Moroccan subsidiary announced the official launch of construction for its battery production base in the Kenitra Atlantic Free Zone. This represents Africa's first large-scale electric vehicle battery manufacturing facility.

Gotion High-Tech's project initially plans annual capacity of 20GWh, with subsequent expansion to 40GWh. Beyond full-chain battery production, the facility will focus on manufacturing cathode and anode materials. Official production is expected to commence in Q3 2026.

This investment project marks merely the beginning of Gotion High-Tech's first-phase development plan in Morocco. The company plans to eventually increase capacity to 100GWh, with total investment estimated at 65 billion dirhams (approximately $5.05 billion).

The decision to invest in Morocco likely reflects lithium battery supply chain companies' comprehensive assessment of Morocco's strategic advantages: proximity to Europe, mature automotive industry infrastructure, and stable policy environment.

Morocco sits at the Gibraltar Strait gateway, merely 14 kilometers from Europe, with Tangier Port reaching core European markets within 48 hours, effectively circumventing EU carbon tariff barriers.

Additionally, Morocco stands as Africa's only nation with free trade agreements with both the EU and United States, enabling zero-tariff product access to both major economic blocs while reducing transportation costs by 35-40% compared to direct supply from mainland China.

This "Mediterranean springboard" effect allows companies to circumvent the US Inflation Reduction Act's subsidy restrictions on Chinese enterprises, reshaping global supply chain configurations.

Why is Morocco Attracting Investment from Chinese Lithium Battery Companies?

Abundant Resources of Raw Materials for Lithium Batteries

From a resource perspective, Morocco controls 73% of global phosphate rock reserves. Phosphate serves as a core raw material for lithium iron phosphate batteries, directly reducing LFP battery production costs. Morocco also possesses Africa's second-largest cobalt reserves (ninth globally in production), creating a "phosphate + cobalt" resource insurance policy. Companies like BTR have established cathode and anode material production bases locally, constructing a vertical industrial chain from mining to batteries.

Favorable Tax Treatment and Policy Subsidies

Policy-wise, Morocco offers "five-year exemption, five-year half-reduction" income tax incentives, complete equipment import duty exemptions, and reduced VAT rates of 10% for new energy projects. Companies using 30% local raw materials can receive green electricity subsidies of $0.02/kWh, with comprehensive business costs 15-20% lower than Eastern Europe. The government has further committed to providing sovereign fund investment and green electricity supply for projects like Gotion High-Tech's facility.

Complete Industrial Cluster

In terms of industrial synergy, leveraging an established cluster of over 200 automotive component companies, Morocco's automotive industry exports exceed $14 billion annually, forming a complete supporting system from stamping parts to powertrains. Gotion High-Tech's gigafactory location in Kenitra Free Zone neighbors production bases of Renault, Stellantis, and other automakers, enabling "over-the-fence" supply capabilities.

Overall, against the backdrop of US-China trade tensions, Morocco has emerged as a "safe harbor" for mitigating geopolitical risks. Through equity structure adjustments, Chinese-invested enterprises can access both the $7,500 US electric vehicle subsidy while avoiding "foreign entity of concern" restrictions. This "circumvention strategy" has driven Chinese battery industry investment in Morocco to surge 300% between 2023-2025.