How can Zimbabwe profit from lithium if China is the processor?

AllAfrica

4 days ago

Zimbabwe has the largest lithium reserves on the African continent. Lithium has been mined since the colonial period in the 1950s. It's a critical part of rechargeable lithium-ion batteries that are essential for the electric vehicle industry. Globally, the lithium-ion battery market is worth US$78.9 billion and is likely to amount to US$349.6 billion by 2034.
In 2021, there was a new lithium rush in Zimbabwe because of increased global demand for the mineral. Today, most of Zimbabwe's lithium mines are owned by Chinese mining companies like Sinomine, Zhejiang Huayo Cobalt, Chengxin Lithium, Yahua and Canmax.
Lithium-ion batteries aren't made in Zimbabwe. Instead, the country exports the mineral as a raw resource. Much of the value of Zimbabwe's lithium – 480,000 metric tonnes mined since 2015 – is reaped by companies in China which make the raw lithium into batteries and other goods.
During the lithium rush, artisanal miners were involved in the lithium industry. They mined and sold raw ore. But their participation has recently slowed down because artisanal lithium mining is largely illegal. For this reason, official data reports haven't been able to record how much lithium has been mined this way.
In 2022, the Zimbabwean government banned the export of raw lithium ore in an attempt to regulate the industry and curb artisanal lithium mining and illicit exports.
However, it was still permitted to export lithium concentrate (a powdered version of the raw mineral). But the government recently decided to ban the export of lithium concentrate from January 2027. It says the ban will improve the country's efforts towards building facilities that add value to lithium, such as lithium refineries and battery production plants.
If properly implemented and regulated, the new ban on exporting lithium concentrate could increase Zimbabwe's self-sufficiency in lithium processing. It could even help the country achieve the middle-income economy it has set out in its Vision 2030, in which it aims to have a mining industry that generates US$12 billion a year in revenue.
Zimbabwe has the world's second largest reserves of platinum and huge supplies of chrome. Making goods locally from lithium would expand the mineral export revenue in addition to platinum and chrome.
However, becoming a middle-income nation is currently hampered by mining revenue leaking away through losses from smuggling, tax evasion and other causes.
Also, environmental justice groups estimate that raw lithium weighing about 3,000 metric tons leaves the country daily. Between now and the time the 2027 ban on exporting lithium concentrate comes into effect, about 1.6 million additional tonnes of raw lithium could have been extracted and sent overseas. This means the government should not wait for 2027, but should implement the ban on lithium concentrate exports now.
The ban also doesn't seem to be aimed at uplifting the livelihoods of communities who live near lithium mines. I describe these communities as living in sacrifice zones: they bear the brunt of lithium mining pollution and land grabs for mines. These vulnerable groups include women, children and artisanal lithium miners who have been disempowered by the just transition.
To use its lithium reserves to uplift the country, the government of Zimbabwe needs to establish local plans that place community development and improved livelihood of mining communities at the center of mining. This could be done through pro-poor development policies that will create employment opportunities for local people in lithium mining frontiers. It could also include compelling mines to purchase locally made goods and fresh produce. Bringing artisanal miners into local value chains in gold, diamond and chrome mining would also help these informal miners become part of the formal mining economy.
Zimbabwe is one of the 10 biggest global lithium exporters. (Chile, Argentina and Australia are others.) In the first nine months of 2023 alone, it is estimated that about US$209 million worth of Zimbabwean lithium was sold.
The potential of lithium to stimulate economic development and attract international investments is unquestionable. The problem over the last few years, however, seems to be that the market isn't regulated enough. Lithium mining has not created many jobs, and for the few who are employed, there've been gross human rights abuses, wage cuts and a lack of investment in road infrastructure.
The politics of lithium mining are also shaped by networks of political elites. They are known as the lithium barons: people who engage in corrupt deals and smuggling.
Another problem has been the misplaced focus on artisanal miners. For example, the 2022 lithium ban mainly targeted artisanal lithium miners who were on the margins of the industry. It did not affect large-scale mining companies to the same extent. When the lithium ban was introduced, the market for processed lithium expanded and the demand for unprocessed lithium drastically shrank. This left artisanal miners with raw lithium and a shrinking market price.
Between now and 2027, lithium mining companies in Zimbabwe will try to extract as much lithium as possible before the ban comes into effect. This could deplete the lithium reserves in the country. Mining investors might look elsewhere.
The Zimbabwean government should take these steps to solve the problem: The Zimbabwe government must ensure total monopoly of its lithium reserves. The over-reliance on Chinese investments in the lithium industry has set a bad precedent for what might happen with other minerals in the future. It will take time for the government to undo this and set up its own monopoly. This resource sovereignty will be vital.
The government must consider how to govern minerals in a people-centered way. So far, lithium has not benefited ordinary Zimbabweans.
The resource communities where extraction deals are taking place must be consulted and brought into the conversation about how Zimbabwe can benefit from its lithium reserves. Communities in Zimbabwe like Buhera, Bikita, Mberengwa and Goromonzi have endured years of lithium mining pollution. This includes their freshwater sources being contaminated by mines, toxic dust from blasting, mineworkers being exposed to hazardous and unsafe working conditions, displacement and – above all – gross human rights abuses from multinational lithium mining companies.
The ban on the exports of lithium concentrates is crucial for stimulating local beneficiation and value addition. The government should implement this ban immediately rather than waiting for the 2027 timeline.
Jabulani Shaba is a postdoctoral researcher at the University of Groningen who researches resource extraction and environmental change caused by mining in southern Africa.
This article is republished from The Conversation under a Creative Commons license. Read the original article.