From Lexology. Story by Paul Schroder and Ryan Gawrych, King & Wood Mallesons, a Hong Kong-based law firm.

In Africa, the big-hitting commodities have traditionally been diamonds, iron ore, gold and copper. But with the global energy landscape rapidly changing and disruptive technologies on the rise in 2016, many investors are turning their attention to opportunities in specialist technology metals during the current downturn.

The poster child for this trend has been lithium.

An essential component in lithium-ion batteries used by the manufacturing and telecommunications sector, lithium has tripled in price since the beginning of 2015 on the back of forecast shortages in both carbonate and hydroxide. At the same time, the number of acquisitions involving lithium has skyrocketed as companies seek exposure to the metal.

While Africa has lithium deposits in Zimbabwe, Niger, Namibia, Senegal and Cote d’Ivore, it has seen very little deal activity in the sector. We don’t expect this to change. As is the case whenever companies scramble for exposure to a particular metal due to investor appetite, speculation often overshoots demand and there are increasingly loud voices pointing to the impending burst of the lithium bubble.

Interestingly, natural spherical graphite, which is used in greater quantities in high-end lithium-ion batteries than lithium, has received little attention. Almost 100 percent of this graphite is produced in China and with demand outpacing supply there will be opportunities in jurisdictions such as Tanzania and Mozambique for those companies looking to diversify sources of supply.

Beyond lithium and graphite, specialist metals such as cobalt, cadmium, tungsten and zirconium are expected to see increased demand over the long-term as they are critical to consumer electronics and clean energy technologies. As these metals are produced as by-products of base metals that are plentiful in Africa, we see this as another potential value driver for companies looking at acquiring distressed assets.

Overall, we expect that tough conditions and a cautious approach in securing the right assets, at the right price, will ensure deal activity in Africa remains lackluster into 2017.

However, long term fundamentals remain strong and it may only be a matter of time before M&A normalizes in African mining. In the meantime, the boldest and best positioned companies will take advantage of lower prices and a glut of assets to ready themselves for the next phase of the cycle.

Read more at Lexology.