Lithium is keying up buoyancy in mining

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OPTIMISM is high among both authorities and analysts about the prospects of the country’s key mining industry.
This is especially so in the wake of the recent crafting of a new lithium policy by the government, which is expected to further lift the sector’s contribution to the economy significantly.

Zimbabwe has the largest lithium reserves in Africa and the sixth largest in the world. The country is also estimated to have the highest number of lithium projects under exploration on the African continent.

In this light, Harare has set a conservative target of at least US$500 million in annual earnings from the soft, silvery metal, which has the lowest density of all metals — as the country bids for a US$12 billion mining economy by the end of this year.

However, and following the recent prohibition of raw lithium exports, annual revenue of US$600 million is expected from just one processing plant, according to the minister of Mines, Winston Chitando.

One of the most important uses of lithium is in rechargeable batteries for mobile phones, laptops, digital cameras and electric vehicles. Lithium is also used in some non-rechargeable batteries for items like heart pacemakers, toys and clocks.
At the same time, minerals currently account for about 60 percent of the country’s total export earnings, with the mining sector also making up 16 percent of Zimbabwe’s gross domestic product (GDP).

Speaking to The Financial Gazette this week, the chief executive of the Zimbabwe Investment Development Authority (ZIDA), Tafadzwa Chinamo, said lithium was likely to contribute substantially more to the fiscus than had been previously anticipated.
“You might have noted that the government first imposed a ban on raw lithium ore last year, before issuing a lithium policy last month.
“This speaks to the government’s commitment to funnelling all lithium earnings to the fiscus. For the first quarter of this year, we have had a lot of enquiries and interests in the mining sector, particularly lithium.

“From the statistics that we have, we are confident that lithium processing will increase the mining sector’s earnings,” the upbeat Chinamo said.
Lyman Mlambo, the chairperson of the University of Zimbabwe’s Institute of Mining Research, also said lithium was set to boost the government’s revenues.
“In the near and medium-term, lithium is going to play a significant role in terms of its contribution to the fiscus.
“Value addition and beneficiation maximises the value chain for lithium and the maximisation of the value, which then converts into revenue for the government and also to other beneficial linkages in the economy,” he said.
However, Farai Maguwu, another analyst, said transparency was key if Zimbabwe was to realise full economic benefits from the mining sector, and especially the processing of lithium.
“We need transparency from the beginning right up to the end product. In this regard, Parliament must play its oversight role, and certain deposits must be reserved for locals.
“Ultimately, the benefit of mining is determined by the value that remains in the country, and this value is determined by the level of involvement of locals in the sector,” he said.
Maguwu also said the government should consider reaching agreements with other lithium-producing countries, so that Zimbabwe could derive optimal benefits from the mineral.
“It will all depend on the level of beneficiation. If it’s just crushing ore into concentrate and then exporting the concentrate to China, then the whole beneficiation noise is just a ruse.
“We need to extract the actual lithium and ensure that batteries are manufactured in Zimbabwe for export.
“Government needs a real business model that goes beyond the rhetoric of beneficiating, to creating a conducive environment for beneficiation,” Maguwu added.

All this comes as the recent global demand for lithium has seen its price soar by more than 180 percent in the past year alone.
Lithium carbonate spot prices in China, the world’s biggest EV market, at some point climbed to a record $84 000 per tonne late last year.
According to Chitando, Zimbabwe will have at least two lithium processing plants by the second half of this year.
“The Sabi Star Mine Lithium Processing Plant in Buhera district of Manicaland Province has reached 80 percent completion and is expected to employ 400 workers.
“Construction of the Prospect Resources Lithium Plant in Goromonzi district in Mashonaland East Province has been completed, and the plant is set to employ 2 000 workers,” he said recently.
Previously, Sabi Star had been mining and stockpiling raw lithium, while constructing the plant. The lithium mine sits on 3,8 hectares, and the resource is mined via an open pit method. The lithium is recovered using the floatation method.
Chitando says his ministry has also received many other proposals for the local processing of lithium since the ban on exports of the raw product was effected.
“The ban has been very successful because since we put it in place, we have received over 20 proposals for value addition.
“That was not there before the ban, and I am happy that some of the proposals are on a small-scale and some are on a large-scale,” Chitando said recently while addressing a Zimbabwe Miners Federation base minerals stakeholder workshop in Harare.
“We have quite a few indigenous people who have come up with very good proposals. Hence, it is all very fascinating,” he added.
The minister also insisted then that the country was losing considerable value through exports of raw ores of the mineral.
“What was happening at the time of the introduction of the statutory instrument was that lithium ores were being exported.
“If you look at the value that was paid to the small-scale miners who were exporting or mining the ore, you look at the value that was coming into the country, and you then look at the value that you would accrue to the recipients who do value addition, the difference is huge,” he added. newsdesk@fingaz.co.zw