Zimbabwe: Can the Government Succeed in Beneficiating its Vast Lithium Resource?

An important announcement…

In December 2022, the Zimbabwean Minister of Mines and Mining Development issued the following government notice: “No lithium-bearing ores, or un-beneficiated lithium whatsoever, shall be exported from Zimbabwe to another country.” The notice went on to state that the ban did not extend to any lithium concentrates which mining houses operating in the country may produce in the future. (The 2023 Base Minerals Control Order has widened the range of mining products to which the export ban applies and includes tailings and slimes etc.)

Lithium as a major windfall for Zimbabwe…

The global demand for lithium is exceeding demand as the world turns to clean energy technologies. The mineral’s high-capacity storage properties mean that it is in strong demand for renewable energy grids, electric vehicles, and lithium-ion batteries. The world requirement is forecast to reach almost 990 000 tons in 2023, and the price could increase from US$44 000 per ton to US$61 500 per ton in 2023.

Zimbabwe is fortunate enough to hold a considerable lithium resource with reserves estimated at 10,8 million tons. It is ranked as the world’s sixth-largest producer and is Africa’s largest supplier ahead of Namibia, the DR Congo, Mali, and Ghana. The Bikita mine is the country’s largest lithium operation producing 60 000 tons per annum with plans to increase it to over 400 000 tons. Permits for new mines are being granted.

The government has declared its intention to triple its lithium production by 2025 and has also announced its ambition to eventually meet 20% of world demand.

Not just export of raw lithium…

African countries are increasingly determined to end the long-standing historic practice of exporting their substantial mineral, agricultural and other resources in a raw, unbeneficiated state. Zimbabwe wishes to ensure maximum value-addition to its lithium exports, and the mining companies are currently being requested to submit their value-add plans to the authorities. The ban on raw lithium exports will compel the operators to develop such plans.

Does Zimbabwe have the capacity to beneficiate its lithium?

In 2011, I was on a family visit to Bulawayo when my cousin asked me to accompany him to visit his son-in-law who was working in a factory in the Belmont industrial area. What I saw there was disquieting. Empty factories; others converted into warehouses and small shops and a few clearly operating at minimal capacity; a few bedraggled workers taking long siestas in the shade.

But that was a good few years ago and the government has announced plans for the restoration of Bulawayo to its former status as an industrial and transport hub. These plans include promises of financial and technical support to distressed manufacturers in the city. Perhaps the engineering workshops, textile plants, shoe factories, and mining component producers will return?

The lithium beneficiation venture is closely related to the drive for the country’s re-industrialization. The Confederation of Zimbabwe Industries recently reported that manufacturing capacity utilization has declined to just over 34%. The government will have to revitalize its industrial base and is consequently promoting the development of its special economic zones. However, Zimbabwe’s mining sector is growing at around 8% per annum, and value-add in this particular sector presents a potentially lucrative opportunity.

And there are other factors that could inhibit the beneficiation drive…

The obvious risk is that in the longer term, the global lithium price could drop. Many African countries that are overly dependent on a commodity (oil, copper, etc.), have experienced windfalls when world prices are high, but also steep economic falls when these prices drop.

As the mining companies are compelled to develop local processing plants, they may register diminished profits and be less willing to expand their operations and increase production. Also, in the global context, Zimbabwe is a small producer and investors may consider investing elsewhere. In 2022, Australia and Chile accounted for 77% of global production.

Although the standard of the Zimbabwean work force is high, there is a shortage of the appropriate technical skills required for mining industrialization.

And then there is the role of China…

China is not only the world’s third-largest lithium producer, but also a leader in the processing of the lithium concentrate into a compound required by the battery and other manufacturers. It has the technology required for beneficiation. And thus, the recent announcement of the establishment of a US$ 2,8 billion battery minerals park by Chinese contractors in a new energy special economic zone is an important development. Local production of beneficiated lithium products is in sight.

Chinese mining houses have already invested nearly US$ 700 in lithium projects in Zimbabwe, and there are more Chinese-operated mines to come. Operators from other countries are showing interest, and a UK-based company was recently granted a permit for exploration of the Kamatavi lithium resource. However, Chinese investors have taken over a good number of mining operations in southern Africa previously held by western companies.

I was associated for a few years with Anvil Mining of Australia, which had developed copper and cobalt mines in the DR Congo. My services as a consultant to the company were fairly abruptly halted when their operations were taken over by Minmetals Resources, a Chinese investor. At the time, Minmetals also gained control of other non-Chinese operations in the DR Congo.

Zimbabweans put their thinking caps on…

Zimbabwean economic commentators are wrestling with the issue of achieving lithium beneficiation. One interesting proposal is that lithium-producing countries in Africa band together to control supply, price and marketing of their production, along the lines of the Organisation of Petroleum Exporting Countries or OPEC.

A worthy cause…

Africans need to benefit from their continent’s abundant resources. Uganda is seeking to ensure greater local benefit from the oil produced from Lake Albert. Mozambique wants LNG plants established from its vast natural gas reserves in the Rovuma Basin. Zimbabwe’s plans for lithium beneficiation fall in with this laudable trend.

In any event, Africa has to take cognisance of the global imperative to move away from fossil fuels such as coal, and lithium mining is a key to greater use of renewable energy sources.