As the global economy goes green, rechargeable batteries are key to this transition. Lithium, a soft and silvery mineral, is an essential component in battery making due to its high electoral component.

Belarusian leader Alexander Lukashenko, referred to as “Europe’s last dictator”, visited Zimbabwe from late January to early February, striking lithium mining deals with his counterpart Mnangagwa. China has already pumped investments in lithium mining in the Southern African nation.

Chinese dominance

China is the world’s biggest lithium battery manufacturer, with about 65% dominance. Ireland, Belgium, the UK and Australia are some of the nations that have an interest in lithium mining in Zimbabwe, but some of them are already being bought by the Chinese tech giants.

• In 2021, Australian-based Prospect Resources was sold for $422m to China’s Huayou, one of the world’s biggest companies in the battery metals business. Prospect Resources, which is listed on the Australian Stock Exchange, has been developing the Arcadia mine in Goromonzi, about 40 kilometres from the Zimbabwean capital Harare.
• Chinese company Sinomine also bought Bikita Minerals for $180m in 2021. In June last year, the Shenzhen-listed company announced it was investing $200m in the first phase for renovations of existing facilities as well as building a new processing plant with a capacity of up to two million metric tonnes per year.
• Chengxin, one of the world’s biggest lithium producers, bought 51% of MaxMind for $76.5m for the Sabi Star mine in Buhera, in Eastern Zimbabwe, about 222 kilometres from Harare.

Mining features heavily in China’s foreign policy because they need rich resources to power their battery production, says a Harare-based economist Victor Bhoroma.

“When you look at battery production, China now dominates, so access to lithium resources is key to China,” he says.

“It is important for that country to be able to come to Zimbabwe and align themselves with the government so that they get licences and permits to mine and export lithium.”

For now, China has already won the race for lithium battery production, says Bhoroma.

Deals have apparently been signed, but these are not available for public scrutiny, so it is unclear who benefits

“In Zimbabwe, about four biggest lithium producers have been bought by Chinese affiliated companies. That means they have also taken leadership here.

“We have companies from the European Union, Australia and Britain doing exploration in the lithium mining industry in Zimbabwe. Hopefully, we [will] be able to have a more or less ‘balanced diet’ in terms of investors in the country. We need investors from the EU and the US,” he says.

Some Chinese-owned companies like Chengxin and Huayou Cobalt already have plans to invest in lithium processing plants in Zimbabwe.

Meanwhile, Bhoroma does not see miners engaging in further processing of lithium.

“They are doing a bit of crushing and processing of lithium ore to lithium concentrates. Without any incentive from the government that will not change. There is a need for financial and non-financial incentives for beneficiation and lithium is one of those minerals key to Zimbabwe’s economy,” he says.

Transparency

The political economy of Zimbabwean lithium will provide a marker to gauge how the exploitation of this important mineral benefits Zimbabwe and its people, as well as those countries and entities it partners with, says Piers Pigou, a Southern Africa Programme head at the Institute of Security Studies.

“Deals have apparently been signed, but these are not available for public scrutiny, so it is unclear who benefits,” he says. “It seems unlikely that Chinese or Belarusian partners will invest in the processing of lithium and will focus rather on ore extraction for export.”

Zimbabwe is working to supply 20% of global lithium demand. It will rank among the top exporters of lithium around the world enabling it to realise its target of being an upper middle-income economy by 2030.

Some 10.8mt lithium ore is estimated to be reserved in the Bikita mining area, located 308 kilometres south of Harare, making it Zimbabwe’s largest lithium mine.

After the mine is deployed, the Arcadia Lithium Mine is expected to reach an annual production of 2.5mt of lithium ore.

According to a 2021 mining report by the London School of Economics, mineral exports account for about 60% of Zimbabwe’s export earnings while the mining sector contributes 16% to its Gross Domestic Product.

Curbing lithium smuggling

Zimbabwe’s ban on exports of unprocessed lithium came into force in December last year after Mines Minister Winstone Chitando issued a government notice in mid-November 2022.

Government officials, at the time, argued that due to raw lithium exports, the country was not realising the benefits of the mineral.

The ban is aimed at curbing lithium smuggling through Zimbabwe’s porous borders to neighbouring countries like South Africa as well as forcing mining companies to set up processing plants.

The country is losing $1.8bn in mineral revenues due to smuggling with gold being the most smuggled mineral.

The export ban highlights the government’s concerns about unauthorised trade, but prohibiting raw lithium exports is unlikely to stop smuggling altogether, says Jee-A van der Linde, a senior economist at Oxford Economics Africa.

A global push for electric vehicles has seen lithium, often called ‘white gold’, become one of the world’s most sought-after minerals

“A global push for electric vehicles has seen lithium, often called ‘white gold’, become one of the world’s most sought-after minerals. High lithium prices appeal to Zimbabwe’s artisanal and small-scale miners,” he says.

“Zimbabwe’s macroeconomic fundamentals are inherently weak, and the economy’s frail state, mainly as a result of policy missteps over the years, means the country is unable to fully benefit from periods of fortuitous commodity prices.”

Violence

Just like gold and diamonds, lithium mining is already causing bloodshed in most parts of the country such as Mutoko, Bikita and Mberengwa.

Bloody conflicts are erupting between small-scale miners and some lithium mining companies, including Chinese-affiliated ones.

“As we have seen, artisanal mining operations are being shut down. It is unclear who is losing and who is benefiting from this,” says Pigou.

Even so, Stephen Chan, a professor of World Politics in the School of Oriental and African Studies at the University of London, believes the situation will ease with the Chinese companies acquiring more lithium mines in Zimbabwe.

“Violence surrounding the mining of lithium does have the potential to escalate. However, the Chinese presence in the Zimbabwean lithium industry will help maintain relative orderliness,” he says.