Can Zimbabwe’s mineral ambitions benefit small producers? | | Story

Harare, Zimbabwe Zimbabwe wants to continue being an exporter of raw minerals and build factories that process and manufacture from its resources. But as the government tightens regulations on the export of unprocessed salt, small-scale researchers are asking whether they will participate in the change or be left behind.

The government has banned the export of unprocessed minerals, including lithium, as part of an effort to boost domestic profits. Officials say Zimbabwe should extract more value from its own mines instead of exporting and allowing other countries to profit from refining and manufacturing.

The scheme has attracted more than $1bn in valuable lithium resources in Zimbabwe, according to government officials and industry representatives. But small-scale miners warn that high construction costs, unreliable electricity and limited access to cash could make it difficult for them to participate in the industry’s ambitions in the country.

Speaking at a Prospect Lithium Zimbabwe (PLZ) technical tour in Goromonzi, Mashonaland East, on July 17, Mining and Mining Minister Polite Kambamura said Zimbabwe’s 2022 ban on the export of unprofitable lithium ore has encouraged companies to invest in their homes.

“Building the first lithium sulfate plant in Africa is behind me, and that happened in Zimbabwe,” Kambamura said.

He said Zimbabwe’s ambitions went beyond lithium sulphate and lithium carbonate production, with the long-term goal of having factories capable of producing lithium batteries and solar panels locally.

Prospect Lithium Zimbabwe, owned by China’s Zhejiang Huayou Cobalt, said its lithium carbonate plant is about 90 percent complete.

PLZ public relations officer Patience Mushore said Huayou’s investment generated more than $1.1bn in Zimbabwe as it boosted the value of lithium in the country.

Change of process

Supporters of Zimbabwe’s anti-export laws say Zimbabwe can no longer sell raw minerals while other countries are taking huge profits from refining and manufacturing.

Government policy expert, Tedious Ncube, said Zimbabwe’s lithium sector shows why the government prioritized profits.

He also mentioned the investments of Arcadia Mine and Bikita Minerals as examples of companies that are expanding the lithium sector in Zimbabwe.

Mr Ncube said domestic projects could create skilled jobs, boost local traders and allow Zimbabwe to retain a large share of its mining revenues.

“The success of the lithium industry in Zimbabwe shows that the right policy can attract investment that builds industries, creates jobs and leaves a significant portion of Zimbabwe’s mineral economy,” he said.

Mining concerns

For smallholder farmers, the debate is not whether Zimbabwe should develop its own mines in the country, but whether they will have the infrastructure, capital, and markets necessary to participate.

Shelton Lucas, who is the director of development at Naivo Mining, said the company operates chrome, antimony and tungsten mines in Mashava, Ngezi and Kadoma but is facing difficulties in finding ways to buy them.

Lucas said small producers are struggling to find the labor force, especially in the chrome sector.

“For our raw chrome, we are now forced to sell it to Chinese smelters who pay us less. For antimony, I have the money to build a machine to add value, but chrome I can’t because the plant is expensive,” he said.

He said he supported local jobs but warned that small-scale miners could be pushed out if new requirements are imposed without support measures.

Lucas proposed a system of tax breaks, where governments or corporations invest in mining facilities that miners can access at transparent prices while retaining ownership of their minerals.

“The challenge is not only to build production facilities, but also to ensure that small producers can get enough opportunities,” he said.

Without such measures, he warned, few companies would be able to improve operational efficiency and market access.

“If these companies have the right to export goods, they can dictate prices to small miners, creating a market that can be disruptive to the people the mining sector wants to empower,” he said.

Financial problems

Economists say what Zimbabwe needs to do depends on whether the country can overcome its long-standing problems in mining and manufacturing.

A Zimbabwean economist, Chenayi Mutambasere, who is based in the United Kingdom, told Al Jazeera that the plan is facing obstacles such as lack of electricity, high costs, lack of governance.

“Prohibition should be more than a political exercise; it should be an industrial action,” he said.

Mr Mutambasere said the government should support the program with reliable electricity, encourage donors, improve skills and clear timelines.

He warned that restrictions imposed before the aid measures were put in place could lead to unintended consequences.

“Sudden ban on companies investing in this sector could lead to an underground mining sector, which could increase salt leakage,” he said.

The vision of the government

Secretary General in the Ministry of Information, Media, Media and Broadcasting Nick Mangwana told Al Jazeera that the plan aims to ensure that Zimbabwe gets the most out of the unlimited mining.

“The government is setting up a plan to make a profit in our mines so that the economy can develop and we can get a lasting record that future generations will see,” said Mangwana.

He said that the policy did not only apply to lithium but also to other modern minerals, including platinum group metals such as palladium, rhodium, ruthenium, iridium and osmium.

Zimbabwe’s insistence reflects a major debate among the world’s richest countries: whether restricting exports can create domestic businesses without privileging a few large firms.

For small-scale miners, the success of the policy will depend not only on the amount of mineralization in the country, but also on whether the profits will lead to participation or exclusion of the larger players who can compete with them.

Lucas said the goal should be to ensure that local development expands opportunities in all mining areas rather than creating new barriers for small producers.

“Profit should not be a barrier to participation. It should be an enabler of inclusive growth, industrialization and economic reform,” said Lucas.