Online Reporter
Zimbabwe’s rising exports are driven by an ever-growing parcel of primary and, hopefully in the near future, manufactured products, each providing streams of value and income to make up ever larger totals in what we earn in global and continental markets.
Agricultural exports are dominated by tobacco, although horticulture, including citrus and other fruits, has started assuming more importance and driving up farmer incomes. Many other agricultural products are likely, as time marches on, to become value-added processed foods from a growing agro-industrial base.
But even with record tobacco crops, and even with more value being added and planned, it is the national mineral wealth that already constitutes the largest source of exports. With most minerals seeing value added — either to export the actual metal bars or desired salts that global markets pay top dollar for, or to provide the raw materials for a fast-growing industrial base — Zimbabwe’s mineral sector is pivotal.
The country’s mineral wealth has always been conveniently divided into three. At the top, when it comes to value, is gold — the metal that attracted pre-colonial traders and colonial exploiters. Zimbabwe produces highly processed gold, usually for buyers who only need it included in certified bullion ingots for global markets, where investors prefer to hold gold rather than carry it in their asset mix.
Besides some limited use in jewellery and a few industrial applications, gold has little commercial demand.
It has been described as a mineral that is dug out of the ground, refined, and then reburied in bank vaults.
Coal, largely an energy mineral, is exported in modest quantities, usually as processed coke, but much is used domestically for power generation and increasingly as a raw material in steel production.
Where the most serious promise lies is in what were once called the base metals — minerals that are neither gold nor silver. At independence, asbestos was a major export, but health risks reduced its global and local markets to zero.
Chrome and nickel have been important mainstays, and with the Government’s insistence on exports being at least partly processed into metal bars, even if alloyed with iron, their value has risen once again.
Considering Zimbabwe’s resurgence as a steel producer — this time through an investor keen to export stainless steels — it is likely that increasing percentages of these metals will serve as raw material for higher-value steels.
The small deposits of tin and copper were never vast and have largely been exhausted.
What has risen in importance in recent decades are the platinum group metals, vital in many industrial processes as catalysts and additives.
Zimbabwe holds the second-largest global reserves, with relatively low mining costs, so their importance will grow. The main producers have been gradually increasing local processing, although final stages are still done in South Africa. Nevertheless, the value additions already make a difference and will continue to do so.
Iron ore production collapsed when Zisco closed but has risen again with Manhize. This is a mineral where no Government pressure for processing is needed. Zimbabwe is too far from bulk ports to ship anything except refined steel. Ore exporters normally have rich deposits within a few kilometres of their coast and can simply shovel it up and ship it off.
The most recent boom has been in lithium. Everyone knew Zimbabwe had some lithium in the then small global market before lithium-ion batteries were developed, as it was mined in small quantities in Bikita for around a century. But as the price and demand grew, specialist prospecting investors established that reserves were much larger, and then the giant mining companies arrived.
Zimbabwe is now number six in the lithium world, and number one in Africa, well placed to maintain its position as a major producer.
The Government’s insistence that Zimbabwe will not use trade for political objectives, only for wealth and commerce, means that there is virtually no country unwilling to buy from Zimbabwe.
Again, the Government’s insistence on local processing into the common lithium salt required by major manufacturers — so exports can be fed straight off the ship into factories — is keeping values up and rising.
Despite the fall in most non-gold mineral prices last year, Zimbabwe managed to ship a little more in terms of value, as well as rises in terms of volume.
Now geological prospecting companies have identified up to a couple of dozen rarer minerals, including valuable rare earth metals needed in much modern electronic equipment.
We are still assessing at what price deposits might be viable, but it is almost certain that these will need local processing to be profitable, as shipping low-concentrate ores is simply never viable.
In many cases these modern minerals, along with iron ores rich enough to make steel viable, will provide the raw materials for a sophisticated industrial base in Zimbabwe as well as supplying global markets. It is not so much an either-or, but a way of making the most money from our minerals.
Local processing is a must, but local manufacture may not absorb the sort of reserves of some minerals that we possess.
If you mine 20 percent of world lithium as a small country, it is unlikely you can make 20 percent of the world’s batteries, although you can make a decent share. So some mineral exports will remain processed products, while a rising percentage can be channelled into Zimbabwean industries.
