Zimbabwe has set an ambitious target to grow its mining sector to a US$12 billion industry by 2023, as part of its efforts to achieve an upper-middle-income economy by 2030. The country, which has the largest lithium reserves in Africa and the sixth largest in the world, is poised to become a global player in the sector upon the completion of several lithium mining and processing projects that are at different stages of implementation.
According to the 2023 budget statement, lithium mining companies have been given a deadline of March 31, 2024, to submit beneficiation plans as the government seeks to tap into substantial mineral revenues that can be generated from the value addition of key minerals. The government believes that Zimbabwe, with a significant resource endowment of platinum group metals (PGMs), gold, lithium, and diamonds, can undergo economic transformation and development anchored on beneficiation.
The budget statement also stated that no licenses shall be granted to a prospective lithium company without the approval of a beneficiation plant. The objective is to beneficiate lithium up to the carbonate level, the fourth stage of beneficiation in the medium term, and ultimately to the local manufacturing of lithium batteries for electric vehicles.
Experts estimate that 20 percent of the world’s lithium demand can be met by Zimbabwe if it fully exploits its reserves. As the world moves towards zero net emissions, lithium will drive economic growth in producing countries. In Zimbabwe’s case, the sector is an integral element of the government’s plans to revive the economy, which has been battered by hyperinflation, sanctions, and the COVID-19 pandemic.
Several Chinese companies that made multimillion-dollar acquisitions in Zimbabwe are engaged in building up lithium processing plants, following the ban on raw lithium exports in 2022. Some of the notable projects include the US$422 million deal where Zhejiang Huayou, the world’s biggest producer of cobalt, acquired controlling rights to Zimbabwe’s Arcadia mine, and the potential acquisition of a Zimbabwean lithium mine between China Natural Resources Inc, Feishang Group Limited and Top Pacific (China) Limited valued at approximately US$1.75 billion.
The government has also proposed to introduce a 1 percent levy on the gross proceeds of lithium, black granite, and other cut or uncut dimensional stones and quarry stones, with the funds derived from the levy to be ring-fenced for community development in the area where the mining operations transpire. The government noted that the communities affected by mining operations lose the natural inheritance marvels that future generations will never enjoy, and should be provided with basic services that include water, health care, electricity, and sanitation, among others.
The mining sector is expected to grow by 7.6 percent in 2024, driven mainly by ongoing investment in PGMs, gold, coal, and lithium. The sector contributes more than 60 percent of Zimbabwe’s export receipts, attracts more than 50 percent of foreign direct investment, contributes about 13 percent to GDP, and generates significant employment. The government hopes that the mining sector will be the forerunner in the provision of backward and forward linkages with other economic sectors, the creation of decent jobs, infrastructure development, export earnings, and foreign currency generation.
Source: Bulawayo24 News
