The
country’s
vast
mineral
resources
–
in
particular
iron
and
lithium
–
place
it
in
a
critical
position
in
the
global
energy
transition.
With
its
large
lithium
deposits,
some
experts
say
it
has
the
potential
to
meet
up
to
20%
of
the
global
demand
for
the
light
metal.
However,
in
2021
it
produced
only
1%
of
the
world’s
lithium
and
ranked
sixth
amongst
the
leading
lithium-producing
countries
after
Australia
(52%
of
global
production),
Chile
(25%),
China
(13%),
Argentina
(6%)
and
Brazil
(1%).
In
2021, Zimbabwe’s
total
output
was
1,200
tonnes
compared
with
Australia’s
55,400
tonnes.
In
2022,
it
had
the
planet’s
seventh
biggest
proven
lithium
reserves,
estimated
at
310,000
tonnes
(Chile
had
the
world’s
biggest
reserves
at
9.3mn
tonnes).
As
well
as
lithium,
the
country
is
blessed
with
a
treasure-trove
of
close
to
40
other
minerals.
It
has
some
of
Africa’s
largest
deposits
of
coal,
diamonds
and
gold,
as
well
as
vast
quantities
of
chromium,
nickel
and
platinum
group
metals
(PGMs)
—
many
crucial
for
emerging
clean
energy
technologies.
The
country
boasts
the
second-largest
platinum
deposit
and
high-grade
chromium
ores
in
the
world,
with
around
2.8bn
tonnes
of
PGM
and
10bn
tonnes
of
chromium
ore.
It
is
also
one
of
the
continent’s
largest
exporters
of
nickel
ore,
with
South
Africa
and
Mozambique
the
main
destinations.
It
boasts
a
massive
37bn
tonnes
of
good-grade
iron
ore
reserves
that
are
yet
to
be
exploited.
It
will
soon
start
exporting
iron
and
steel
from
the
Manhize
plant
in
Midlands
Province
–
a
giant
China-funded,
$1.5bn
project
set
to
position
the
country
as
the
biggest
steel
producer
on
the
continent.
Endowed
with
over
4,000
recorded
gold
deposits,
Zimbabwe
enjoys
the
second
largest
gold
reserves
per
square
kilometre
in
the
world.
As
the
country’s
largest
export,
gold
is
vital
to
country’s
economy,
serving
as
the
main
driver
of
economic
growth
in
the
short
term
and
attracting
the
most
foreign
direct
investment.
Held
mostly
in
the
country’s
Great
Dyke
–
a
550-km
linear
early
Proterozoic
layered
mafic-ultramafic
intrusion
–
the
country’s
resource
base
of
PGMs
offers
a
unique
opportunity
to
develop
world-class
mines
and
processing
facilities.
The
government
also
had
the
aim
of
increasing
diamond
production
to
11m
carats
in
2023
and
the
diamond
industry
is
poised
to
contribute
at
least
$1bn
to
mining
output
revenue.
Accounting
for
around
3%
of
global
diamond
production,
Zimbabwe
is
the
world’s
seventh
largest
producer
of
the
mineral,
with
an
output
of
3,414
carats
recorded
in
2022.
Production
is
expected
to
increase
by
3%
between
2022
and
2026.
However,
its
lithium,
in
particular,
is
considered
world
class.
Despite
modest
investment
levels
so
far,
President
Emmerson
Mnangagwa
–
who
has
been
in
power
since
2017
and
is
now
aged
81
–
wants
to
raise
$10bn
a
year
in
revenues
from
lithium
exports
alone
but
analysts
say
that
is
an
overly
ambitious
target.
Zimbabwe’s mining
sector
has
enormous
potential
but
the
country
faces
an
array
of
challenges.
It
has
a
$47bn
economy
and
16.5mn
people.
This
year
the
IMF
forecasts
an
inflation
rate
of
a
staggering 222% compared
with
an
estimated
314%
last
year.
It
is
estimated
that
the
economy
expanded
at
4.1%
last
year
and
it
is
forecast
to
grow
by
3.6%
this
year.
The
mining
sector
accounts
for
about
12%
of
GDP
and
80%
of
national
exports.
The Chamber
of
Mines reported
the
mining
industry
generated
$5.6bn
in
2022
compared
to
$5.1bn
in
2021,
and
it
projected
10.4%
sector
growth
in
2023.
The
government
set
a
target
of
$12bn
in
minerals’
revenues
by
the
end
of
2023
and
lithium
is
expected
to
contribute
at
least
$500m
to
the
target.
However,
challenges
such
as
persistent
power
shortages,
foreign
currency
shortages
and
policy
uncertainties
have
not
been
addressed
and
the
target
was
probably
missed.
The
country
reportedly
earned
only
$209mn
from
lithium
exports
in
the
first
three
quarters
of
2023.
One
of
the
biggest
issues
that
Zimbabwe
faces
is
sanctions.
At
the
start
of
March
2024,
the
US
removed
sanctions
against
many
Zimbabweans
and
companies
but
imposed
new
ones
on
President
Mnangagwa
and
a
few
senior
leaders.
The
sanctions
list
was
originally
introduced
in
2001
for
alleged
election-rigging
and
human
rights
abuses.
Those
on
the
new
list
include
First
Lady
Auxillia
Mnangagwa,
Vice-President
Constantino
Chiwenga,
Defence
Minister
Oppah
Muchinguri,
senior
security
officials
and
businesspeople
found
to
have
facilitated
state
corruption.
Analysts
say
that
the
more
limited
sanctions
list
is
a
welcome
move.
The
government
will
now
be
able
to
borrow
money,
while
businesses
will
be
able
to
obtain
credit,
buy
machinery
and
make
payment
clearances.
However,
the
country’s
mining
industry
has
also
been
hamstrung
by
power
cuts
–
mines
have
experienced
blackouts
of
six
to
12
hours
a
day
amid
a
protracted
energy
crisis.
Moreover,
Zimbabwe’s
staggering
debt
of
$17bn
and
its
arrears
to
the
IMF
and
World
Bank
preclude
it
from
receiving
fresh
capital
from
multilateral
development
banks
that
could
be
used
for
expanding
electricity
access
and
putting
energy
generation
on
a
more
durable
footing.
Foreign
currency
retention
requirements
have
also
challenged
mineral
exporters,
particularly
at
times
when
the
parallel-market
exchange
rate
diverged
greatly
from
the
official
rate,
which
resulted
in
smuggling.
In
February
2023
the
government
increased
foreign
exchange
retention
to
75%
from
60%
for
mining
companies,
something
that
mineral
exporters
welcomed.
But
a
new
requirement
that
mining
companies
must
pay
electricity
bills
in
foreign
exchange
means
effective
retention
falls
to
between
60%
and
65%.
Exporters
complain
that
the
high
export
surrender
requirements
make
it
difficult
to
access
foreign
exchange
for
critical
capital
expenditure
and
to
finance
operations.
Other
revenue
leakages
the
mining
industry
faces
include
mineral
smuggling,
superficial
government
disclosures,
limited
capacity
of
regulatory
authorities
to
enforce
compliance
in
mines
and
a
lack
of
coordinated
information
dissemination
in
government
institutions.
Government
departments
also
have
limited
skills
to
evaluate
mining
data
and
they
lack
verification
and
assaying
processes.
The
industry
also
has
problems
with
obsolete
technology
and
a
dire
need
for
spare
parts.
Companies
are
required
to
export
all
minerals
through
the
state-owned
Minerals
Marketing
Corporation
of
Zimbabwe (MMCZ),
except
gold,
which
must
be
sold
to
the
Reserve
Bank
of
Zimbabwe’s
subsidiary
Fidelity
Printers
and
Refiners.
Individual
companies
may
receive
permission,
however,
from
the
government
to
sell
minerals
directly
to
avoid
US-targeted
sanctions
on
the
MMCZ
(that
could
now
change
following
the
introduction
of
a
new
sanctions
list).
Given
how
tight
lithium
supply
chains
are
globally,
lithium
exports
could
potentially
help
Zimbabwe
escape
its
status
as
a
pariah
state,
largely
isolated
by
Western
politicians
and
investors.
But
a
big
scramble
is
under
way
for
the
country’s
critical
minerals
and
at
the
moment
China
is
winning
it.
China
has
announced
a
massive
$2.79bn
investment
in
its
lithium
mining
operations
in
Zimbabwe.
In
September
2023,
there
were
more
than
seven
lithium
exploration
and
mining
projects
at
different
development
stages,
with
Chinese
companies
leading
the
race.
In
February
2022,
Sinomine
Resource
Group,
a
Chinese
mining
company,
acquired
the
country’s
only
lithium
producer,
the
Bikita
Lithium
Mine,
from
African
Metals
Management
Services
and
Southern
African
Metals
and
Minerals,
for
$180mn.
The
mine
is
located
in
Masvingo
province
in
the
southern
part
of
the
country,
roughly
300
km
south
of
the
capital
city
of
Harare,
and
reportedly
holds
the
world’s
largest-known
lithium
deposit
at
10.8mn
tonnes
of
lithium
ore
grading
1.4%
lithium,
resulting
in
0.15m
tonnes
of
lithium
oxide.
Sinomine
plans
to
invest
$200mn
to
expand
the
mine’s
production
capacity
by
another
2m
tonnes
per
year
(tpy).
The
investment
will
also
allow
it
to
produce
lithium
spodumene.
In
2022, Zhejiang
Huayou,
the
world’s
biggest
producer
of
cobalt,
acquired
controlling
rights
to
the
Arcadia
mine
from
Prospect
Resources,
an
Australian
mining
company,
for
$422mn.
Zhejiang
has
commissioned
a
$300mn
processing
plant
at
Arcadia.
The
mine
has
capacity
to
process
4.5m
tpy
of
lithium
ore
and
produce
450,000
tpy
of
concentrate.
In
2023,
there
was
also
speculation
that
China
Natural
Resources,
Feishang
Group
and
Top
Pacific
(China)
would
jointly acquire
a
Zimbabwean
lithium
mine
for
around
$1.75bn.
By
March
2024
this
investment
had
still
not
happened.
One
of
the
few
major
projects
that
is
not
Chinese
owned
is
the
Zulu
lithium
and
tantalum
project,
Zimbabwe’s
largest
undeveloped
lithium-bearing
site.
It
consists
of
14
mineral
claims
covering
a
surface
area
of
3.5
sq
km,
which
are
prospective
for
lithium
and
tantalum
mineralisation.
Owned
by Premier
African
Minerals,
the
strategic
metals
and
minerals
developer
listed
on
the
London
Stock
Exchange,
the
project
will
explore
an
inferred
lithium
carbonate
equivalent
resource
of
526,000
tonnes,
grading
1.06%
lithium
oxide.
It
has
107,000
tonnes
of
lithium
in
the
inferred
and
indicated
categories
as
well
as
1,000
tonnes
of
tantalum
(pentoxide).
The
mine
is
set
to
develop
a
50,000
tpy
pilot
plant
by
research
and
development
company
Suzhou
TA&A
Ultra
Clean
Technology
to
the
tune
of
$35mn.
Australian
investors
also
still
run
the Step
Aside
Lithium
Project,
located
35
km
from
Harare
(and
around
8
km
north
of
the
Arcadia
Lithium
Mine
Project).
It
comprises
around
one
hundred
hectares
of
claim
within
the
Harare
Greenstone
Belt.
Western
investors
remain
reluctant
to
work
in
Zimbabwe
and
are
concerned
about
the
human
rights
situation.
They
fear
sanctions,
political
uncertainty,
security
of
investments
and
reputational
risks.
Analysts
say
that
this
is
one
of
the
reasons
that
the
Australian
investors
behind
the
Arcadia
mine
sold
their
mining
rights
to
the
Chinese.
In
December
2022,
Zimbabwe
banned
the
export
of
raw
lithium
in
an
effort
to
build
out
the
country’s
capacity
to
process
battery-grade
lithium
domestically.
The
ban
excluded
companies
that
are
already
developing
mines
or
processing
plants.
The
ban
has
since
been
replaced
by
the
Base
Minerals
Export
Control
(Unbenificiated
Base
Mineral
Ores)
Order
and
adds
critical
minerals
such
as
nickel
and
manganese
ores
to
the
list
of
metals
whose
exports
are
limited.
The
ban
is
also
meant
to
deter
artisanal
miners
from
exporting
ores
abroad.
Smuggling
to
South
Africa
and
the
United
Arab
Emirates
reportedly
costs
the
country
$1.8bn
in
lost
mining
earnings.
In
May
2023,
Winston
Chitando,
the
country’s
Mines
and
Mining
Development
Minister,
said
lithium
miners
must
go
beyond
the
production
of
concentrates
and
develop
production
capacity
for
battery-grade
lithium.
However,
the
country’s
challenge
is
whether
it
will
be
able
to
attract
adequate
capital
and
investment
for
processing
and
refining
lithium
into
finished
products
such
as
batteries.
Zimbabwe
has
huge
mineral
resources
and
tremendous
mining
opportunities.
Yet,
its
potential
has
been
hamstrung
by
power
cuts
and
sanctions.
The
recent
US
decision
to
introduce
a
more
limited
sanctions
list
against
Zimbabwean
leaders
should
be
a
fillip
to
the
mining
industry.
The
government
must
now
make
a
huge
effort
to
end
black
outs
so
that
the
industry
can
take
off.
However,
obvious
concerns
about
the
country
becoming
too
dependent
on
China
will
persist.
–
bne
IntelliNews