Despite recent government commitments to reform, Zimbabwe’s mining sector will likely remain crippled by patronage politics, outdated legislation and regulatory gaps, which will continue to constrain the country’s economic outlook and restrict the extraction of some of the world’s most valuable minerals. Zimbabwe, a small country of about 16 million people in southern Africa, holds some of the largest mineral resources on the continent. Its political leaders, however, have failed to build a flourishing mining industry — a trend that will likely continue under President Emerson Mnangagwa, despite his new push to boost the sector’s profitability. Over the past year, Mnangagwa and the ruling Zimbabwean African National Union-Patriotic Front (ZANU-PF) have introduced new legislation to support the president’s goal of increasing mining revenues to $12 billion in 2023 — a nearly $8 billion increase from 2022. In July, the government announced it would raise royalty rates on platinum producers and introduce royalties for lithium miners from Jan. 1 in an effort to boost revenue and formalize government fees. In December, the government then banned all lithium exports without explicit state permission in an attempt to clamp down on illegal smuggling (which the government says has cost it $1.8 billion in lost revenue). Mnangagwa and ZANU-PF are particularly focused on lithium (a key component in the batteries used to power electric vehicles), given high global demand, anticipated price increases and Zimbabwe’s large deposits of the mineral. But without structural changes to the mining sector and institutional changes to the government, Zimbabwe will fail to reap the full potential of its abundant mineral reserves. 

• The restrictions on lithium exports under the government’s new Base Minerals Export Control Act do not apply to companies that are building lithium processing plants, including Chinese mining giants Zhejiang Huayou Cobalt, Sinomine Resource Group and Chengxin Lithium Group (which together have acquired $678 million worth of lithium mines in Zimbabwe). 
• Zimbabwe holds the largest lithium deposits in Africa and the fifth-largest in the world. The country is also home to the world’s third-largest platinum deposits, along with large deposits of other high-value mineral resources like gold, chrome, coal and diamonds. But Zimbabwe exports just a fraction of its vast mineral riches each year due to problems within its mining sector (such as corruption and mismanagement), which remain pervasive despite politicians’ repeated attempts to revamp the country’s mining economy. 
• The Bikita mine, located 308 kilometers (191 miles) south of the capital Harare, has approximately 10.8 million tons of lithium ore. The Arcadia lithium mine under construction about 38 km (24 miles) east of Harare is also expected to reach an annual production of 2.5 million tons of lithium ore (which would total about $3 billion in exports) once the mine begins operations.

The government’s push to boost its mining sector will face significant obstacles, as patronage and corruption have undermined the efficiency of Zimbabwe’s mining sector for decades. Civil society groups, political opposition parties and human rights watchdogs have repeatedly levied allegations regarding the concentration of mining assets in the hands of ZANU-PF members and supporters. While the ruling party almost always rebuffs these accusations, political connections largely dictate how and when industry laws and regulations are enforced. Such an environment facilitates personal enrichment and quid pro quo deals, which ZANU-PF officials routinely engage in across all sectors of the economy. A 2021 report released by the South African publication Maverick Citizen found that public officials in Zimbabwe regularly abuse their political positions and collude with private companies for self-enrichment, and that companies in the country’s private sector also regularly collude with each other — creating an uncompetitive business environment that siphons billions of dollars worth of public funds each year. Human rights groups like Amnesty International have also drawn connections between politicians and machete gangs known as ”mashurugwi” that police mining locations and enforce politicians’ personal agendas. A rise in mashurugwi-related attacks – and security forces’ apparent inability to stop them — prompted the Mnangagwa government to declare a crackdown on the gangs in 2022. But persistent high rates of violence and alleged relationships between government officials and gang members suggest this declaration was unauthentic. 

• Henrietta Rushwaya, the president of the Zimbabwe Miners’ Federation (ZMF) (an interest organization representing miners from artisanal, small-scale and medium-scale projects) was arrested in October 2022 on a smuggling charge. While flying to Dubai, Rushwaya was allegedly carrying 6 kilograms of gold in her handbag. She says she was transporting the gold for a legal gold buyer, but her claims remain unsubstantiated. 

Outdated legislation, poor regulation and widespread corruption in gold mining reflect the problems that plague Zimbabwe’s entire mining industry. The 1961 Mines and Minerals Act mandates that all gold producers in Zimbabwe (whether artisanal, small-scale or industrial) must sell to the Reserve Bank of Zimbabwe via its subsidiary gold buyer, Fidelity Printers and Refiners (FPR). FPR often underpays and is late to pay gold producers, which has caused some of Zimbabwe’s largest gold producers to halt production at some or all of their mines. Several of these companies have also started legal proceedings against the FPR over revenue losses caused by receiving late payments and payments partially allocated in Zimbabwe dollars, which they allege are selective and based on patronage. In addition, FPR’s mismanagement incentivizes gold smuggling, as artisanal miners can receive higher prices for gold per ounce in neighboring countries. Despite extracting 63% of the country’s gold exports, artisanal miners in Zimbabwe also lack legislative protections, which then forces these smaller miners to rely on political connections as well.

• An estimated $1.5 billion worth of gold leaves Zimbabwe illegally each year, often ending up in Dubai. Some gold dealers estimate that illegal exports are higher than official deliveries to FPR. 
• Petty corruption permeates artisanal mining practices at industrial sites, as members of the police, army and private security firms often require bribes for entry into mining sites or access to nearby housing. Meanwhile, police, magistrates, prosecutors, clerks and court messengers frequently take bribes from artisanal miners operating illegally on industrial sites, which sometimes enable such miners to serve little-to-no jail time for their offenses.
• Zimbabwe has a paper-based system for keeping records on who has mining rights in which areas, leaving ample room for error or fraud. In 2020, the country’s Ministry of Mines became embroiled in a ”double allocation” scandal after officials allegedly granted a second claim to an already allocated plot in exchange for bribes — thereby allowing a second party to mine the plot in violation of the original plot holder’s rights. 

Mnangagwa will likely secure another term in Zimbabwe’s presidential election later this year, which means that mismanagement of the mining sector will probably persist despite the recent reforms, thereby limiting the country’s access to the global market and perpetuating the country’s economic crisis. Zimbabwe is scheduled to hold presidential elections in July or August 2023 (an exact date has not yet been announced). Preliminary signs indicate that Mnangagwa will likely be re-elected, though likely with the help of pervasive voter intimidation and fraud. ZANU-PF’s political embeddedness and willingness to use corruption and violence to maintain power will leave little incentive for Zimbabwean leaders to pass mining sector reforms that would make self-enrichment more difficult. As such, international mining companies willing to play by ZANU-PF’s rules and ignore and/or participate in corrupt practices will continue to benefit from Zimbabwe’s vast mineral reserves. Chinese companies in particular are likely to continue to benefit from Zimbabwe’s lithium reserves at high rates, as their economic participation is not limited by human rights or governance abuses as is the case with Western companies. The U.S. Treasury also maintains a sanctions program against specific members of the Zimbabwean government for undermining democratic institutions, which inhibits American access to Zimbabwe’s resources. As long as there is a market for Zimbabwean resources – be it Chinese or otherwise – the refusal of Western partners to buy Zimbabwean goods due to governance concerns will hold little weight in pressuring the country’s leaders to implement mining sector reforms. Taken together, this means that the industry is poised to continue to suffer from old ills, privileging political elites at the expense of public revenue and industry growth. The ongoing inefficiency of the mining sector — which accounts for about 60% of Zimbabwe’s exports and nearly 20% of GDP — will continue to fuel the country’s long-standing economic crisis as well.

• In 2015, a bill was presented to Zimbabwe’s parliament to update the Mines and Minerals Act. But the proposed amendment has sat dormant under President Mnangagwa and his mines and mining development minister, Winson Chitando (both of whom took office in 2017). 
• Zimbabwe has been in debt default since 2000, as hyperinflation, unsustainable external debt, multiple exchange rates and high spending continuously destabilize its economy. These poor macroeconomic conditions have pushed many Zimbabweans into poverty, with 75% of the population living on less than $5.50 a day. 
• Zimbabwe’s economic growth rebounded to 6.3% in 2021 after contracting sharply by 6.1% in 2019. According to the International Monetary Fund, the country’s economy continued to expand in 2022 (albeit more slowly), with annual GDP hitting 3.5% last year. But while growth has resumed since the COVID-19 pandemic, Zimbabwe’s currency crisis persists, with yearly inflation reaching 2.43.8% in December 2022.