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Business Reporter
WHILE Zimbabwe’s mining history dates back many centuries, the country today remains largely under-explored. With a rich and diverse mining sector, the mineral-rich Southern African country has more than 60 mineral occurrences, although only a paltry 10 are being commercially exploited.
Among those being mined is lithium, the world’s “New Oil”, which will replace internal combustion engine batteries in the global shift to clean energy technologies aimed at curtailing global warming.
Other key minerals in Zimbabwe include gold, platinum, chrome, nickel, coal, diamonds, and lithium. Zimbabwe’s massive yet largely untapped mineral resources offer lucrative investment opportunities for investors and mining companies alike.
The Government is aware of the limitless opportunities lithium and other key minerals present for medium and long-term growth.
Already, mining is one of the key sectors designated to drive the envisaged growth towards the national vision of upper-middle-income status by 2030 and is being given all the support operators need.
President Mnangagwa summed up in July this year why his administration has placed priority on the development of the lithium sector when officiating at the commissioning ceremony of the Arcadia lithium mine, near Harare.
Arcadia mine is one of many lithium projects being developed across the South African nation, where new deposits are being discovered with astonishing regularity.
The President noted: “Lithium is the mineral of the present and the future … and value addition will position our country as an emerging and competitive player in the global lithium value chain”.
Apart from mining, Zimbabwe’s other strategically important economic sectors include agriculture, manufacturing, and tourism.
Mining accounts for about 12 percent of the country’s gross domestic product and generates more than 83 percent of the country’s total annual export earnings.
The extractive sector also accounts for 73 percent of foreign direct investment, 19 percent of Government revenues, 2 percent of formal employment and 11 percent of individual incomes.
By 2030, the sector is projected to generate more than US$20 billion. However, the Government’s immediate target is to grow mineral exports to US$12 billion by the end of this year, with most of the key milestones in this regard having already been met.
It is expected that the lithium sector will generate more than a billion US dollars in exports by the end of 2023, expected to increase rapidly as more producers start operations, with some already at advanced stages.
As the global economy shifts to net-zero solutions, the demand for lithium — among other minerals necessary for the production of many clean energy technologies, especially electric vehicles, has begun to dramatically increase.
Zimbabwe is expected to meet roughly 20 percent of the global demand. This has resulted in significant growth in investment flowing into the country’s lithium sector, given the country’s abundant lithium resource.
The Southern African nation has the largest lithium reserves and mines in Africa, while globally it ranks sixth amongst the leading lithium-producing and supply countries after Chile, Australia, China, Argentina and Brazil.
Notably, Zimbabwe has the largest number of lithium projects under exploration in Africa, and new investments in the sector are expected to catapult the country higher in the rankings of major global producers.
Zimbabwe is the world’s sixth largest producer albeit with only two producing mines, Bikita Minerals, oldest and Arcadia Mine, operated by Prospect Lithium Zimbabwe, which commenced production this year.
As the world transitions to clean energy technologies, Zimbabwe’s expansive lithium assets have not been short of suitors, with foreign investors stampeding for a share of the pie.
The investment space in lithium has been dominated by Chinese companies. China is the world’s largest EVs (the biggest consumer of the lithium mineral) market, which has seen its companies spend “more than US$1 billion over the past two years to acquire and develop lithium projects in Zimbabwe.
The investors included China’s Zhejiang Huayou — the world’s biggest cobalt refiner, which forked out a whopping US$422 million to acquire controlling interest in the Arcadia lithium mine, Premier African Minerals joint venture with Li3 Resources in Zulu Lithium near Bulawayo, Sinomine’s US$180 million acquisition of a 100 percent stake in African metals Management Services and Southern African Metals and Minerals; and the US$1,7 billion acquisition of the Williams Minerals lithium mine by China Natural Resources Feishang Group and Top Pacific.
Bikita Minerals commenced trial production earlier this year at its new spodumene (chemical grade) and petalite (technical grade) plant in Masvingo. When the mine attains full production capacity, it is expected to annually produce 300,000 tonnes of high-quality chemical-grade spodumene concentrate. The mine is estimated to have reserves of about 65 million tonnes. It is important though to note Zimbabwe has large deposits of both technical and chemical-grade lithium, the varieties of lithium concentrates defined by differing levels of lithium.
Technical-grade lithium concentrates are sold to the glass and ceramic markets. Chemical-grade lithium concentrate is sold to processors for conversion into lithium chemicals.
Premier African Minerals, a United Kingdom-headquartered mining group that owns the Zulu project, recently said planned production of up to 1 000 tonnes per month of spodumene is set to begin in November this year.
The Zulu processing plant has the capacity to produce nearly 50 000 tonnes of spodumene concentrate per annum.
Last month, President Mnangagwa commissioned a flotation plant at the Sabi Star Lithium Mine in Buhera, which has set the tone for additional investments in the operation owned by MaxMinds Investments, one of the many Chinese investors in the country’s lithium industry.
The US$130 million lithium mine is among the new base metal operations whose lithium salt plant has an initial annual processing capacity of 30 000 tonnes of lithium hydroxide.
Work is also underway by Sandawana Mines, a previously emerald mine now owned by Zimbabwe’s largest and State-owned mining group, Kuvimba Mining House (KMH), to install a US$215 million lithium beneficiation plant.
KMH chief executive officer Mr Simba Chinyemba said recently that Sandawana Mines resumed operations in January this year and has stockpiled over 820 000 tonnes of lithium ore ahead of the installation of a beneficiation facility with the capacity to process 4,5 million tonnes annually.
United Kingdom headquartered Galileo Resources last month said it had completed phase one lithium exploration drilling programme at its Kamativi lithium and tantalum project in Matabeleland North Province.
This comes as preliminary evaluation from earlier drilling indicated encouraging potential for commercially viable deposits of the valuable mineral.
In a development indicative of the huge potential lithium wields in driving Zimbabwe’s growth, the country’s lithium exports have increased by more than 1 000 percent since 2018 to US$209 million by September this year, Mines and Mining Development Minister Zhemu Soda told this publication earlier this month.
Statistics provided by the Treasury recently show that since the ban on raw lithium exports in December last year, shipments of the beneficiated battery mineral rose to 882 tonnes in 10 months to October this year, according to statistics from the Treasury, a positive sign of better things to come in the near future.
Minister Soda said the manufacture of energy storage devices, mobile phones and electric motor vehicles, along with the widespread growing use of green energy, have all resulted in an increase in the demand for lithium and battery minerals in recent years.
He said this means lithium and battery minerals will be the most sought-after minerals for a long period of time. The rise in demand for lithium and battery minerals has presented a number of opportunities for Zimbabwe as a nation,” he said.
“These opportunities stem from the fact that our nation is blessed with an abundance of lithium resources making it one of the top producers in Africa and the World. “As I have previously mentioned, the demand for materials used to manufacture lithium-ion batteries has increased dramatically. “Due to this demand, new investors, both local and foreign, have entered the sector to mine, process and export lithium and battery minerals from Zimbabwe.”
Zimbabwe’s earnings from beneficiated minerals increased by 283 percent over two years since 2020, according to the official statistics from the Ministry of Finance and Investment Promotion, demonstrating the positive impact of various forms of support the Government has rendered to investors in the sector. Several lithium producers have entered into memoranda of understanding with the Government to participate in the development of the mines to energy park, a transformative project aimed at maximising the value of the country’s mineral resources.
The project encompasses construction of two 300-megawatt power stations, a coking plant with an annual capacity of 1,2 million tonnes of coke, a 130 000-tonne-per-annum lithium salt plant, a graphite processing plant, a nickel-chromium alloy smelter and a nickel sulfate plant.
According to global research firm Wood Mackenzie, demand is growing for lithium-ion batteries to serve electric vehicles and stationary energy storage systems.
“However, thanks to aggressive manufacturing expansion in recent years, the global battery supply is expected to outstrip this demand for some years to come.
“Supply will grow by 45 percent in 2023 alone, amounting to an excess of 1 380 gigawatt Hours (GWh), and while demand will also increase somewhat, the oversupply issue is expected to persist,” the company said.
Regional market demand, government subsidies and restrictions and unit capital cost are crucial to capacity investment, and all of these factors are currently impacting the industry, Wood Mackenzie said.
“Global battery manufacturers pulled back significantly in the first half of 2023, with construction falling by around 50 percent. Although our research suggests demand will grow (reaching an estimated 1 080 GWh this year), the gap is set to widen in the coming years.
“We expect demand for batteries to more than double by 2032, with electric vehicles taking an even larger share of the market than they do today — 84 percent, compared to 79 percent,” the company said.
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