Why All Eyes Are On Zimbabwe’s Lithium Substitute

As the second largest continent, Africa is home to30% of the world's mineral reserves. It holds 40% of the world's gold and atleast 90% of its chromium and platinum. It also has the largest reserves ofcobalt, platinum, uranium, and diamonds. With the global demand for batteriesrising and the search for new sources of energy, the world is reliant on minerals fromAfrican countries. But, many African leaders are looking to reclaimcontrol of the continent's resources. We need to process our lithium and get value. Lithium is a critical component found in electricvehicle batteries and reserves have been discovered throughout the continent, withZimbabwe, Namibia, Ghana, Democratic.

Republic of the Congo and Mali all having notablesupplies. Most automakers have announced a transition toelectric, meaning the demand for batteries and the minerals in them is going to skyrocket. In 2021, the world mined 540,000 metric tons oflithium . By 2025, the demand is expected to triple to 1.5million metric tons, and by 2030, 3 million metric tons. Zimbabwe has been mining lithium for 60 years andthe government estimates that its Chinese owned Bikita mine, located 300km south of the capitalHarare, has about 11 million metric tons of lithium resourcesalone.

Mining in Zimbabwe is very politicized. It's very securitized and sometimes it'smilitarized. In Zimbabwe, there are more than 80 state-ownedChinese enterprises, which have amassed a total of $10.4 billion in investments andcontracts in the country from 2005 to 2020. Meanwhile, the U.S. has fallen behind and relations with the nation,have been shaky. I think they already taken Africa for granted forso long and I think now is the time to say maybe it's time to wake up.

In the future, African countries like Zimbabwewill play an important role in the mining of battery mineral resources. In 2020, Zimbabwe was a sixth largest producer oflithium, and the country is expected to become one of the world's largest lithiumexporters. CNBC explores Zimbabwe's mining sector to findout why China has a stronghold on the country and why it matters to the U.S. Whoever comes to invest in the country must betold that, number one, you have come to Zimbabwe. Respect the Zimbabwean people.

The world is changing and we need to get there. With or without us, Africa will move forward. Africa has other options. Zimbabwe is rising step by step, brick by brick and stone upon stone. No one, no one can stop that movement. Zimbabwe is home to over 60 different minerals,including all five of the critical minerals needed to build electric vehicle batteries: lithium,cobalt, manganese, nickel and.

Graphite. Minerals play an important role in theeconomic growth of Zimbabwe, accounting for 60% of the country's total exports, with themining sector contributing to 11% of the national GDP. In 2023, it's expected to grow by 6% and is valuedat 12 billion U.S. dollars. Mining has played a critical role in terms ofsustaining growth in the economy and we've seen a lot of investments within the mining sector overthe past few years. For us to realize the full potentialfrom the mining sector, it means we have to move up the value chain.

Zimbabwe primarily mines gold, platinum anddiamonds, but lithium prices have skyrocketed. The price in May of 2022 was seventimes higher than the price at the start of 2021. Zimbabwe is looking to capitalize off thisincrease and the country could potentially meet 20% of the world's demand for lithium once itfully exploits its known resources. Lithium has been discovered in many parts of thecountry, close to the surface. The villagers have been mining that lithium andselling to merchants, and that helps in alleviating ruralpoverty.

Chinese companies Huayou Cobalt and SinomineResource Group, owned both the country's most important and resource rich lithium mines. When we invest in the Chinese and allow them tocome and do what Zimbabweans are capable of doing, we are building China, not Zimbabwe. Zimbabweans are saying leave room for theZimbabwean people where the Zimbabweans are able to mine and invest in the local economy. CNBC reached out to the Chinese embassy inZimbabwe, which declined to comment on the statement. The strategy of most of the new investors in thelithium mining.

Industry is to go towards mining solid battery-grade lithium. I don't think the Chinese compete withartisanal and small-scale miners. The Chinese have served as a middleman. Artisanal miners were doing the mining and thenthey would sell to the Chinese mining companies. So, there was some kind of a relationship, aworking relationship. Artisanal mining or small scale mining plays acritical role in the livelihood of over 1 million Zimbabweans. It's a largely informal method ofmining, where individuals use basic tools.

To extract minerals. It's estimated that the government has lostnearly $2 billion in minerals smuggled across the border through artisanal mining leakages. We cannot, as a country continue to be exportingprimary products, including concentrates and ores. In December 2022, the country passed a BaseMineral Export Control Act, which banned the export of raw lithium. However, companies that are developing mines andprocessing plants in Zimbabwe are exempt from this ban. This includes Chinese firms Huayou Cobalt,Sinomine Resource Group, and.

Chengxin Lithium Group, which have invested $678million into lithium projects. Any government in the world was bound to reactwhen your resources are just flying in all directions. However, the lithium concentrate is still beingexported lawfully out of the country. So I think governments simply wanted to controlthe lithium that was being extracted by artisanalminers, which was not being accounted for, and it was beingsmuggled out of the country.

Artisanal miners were the worst affected by theban because they had already accumulated loads of raw lithium thatthey were preparing to sell and they couldn't sell their lithium. They suffered more than any other person. With the new act passed. Zimbabwe is looking to capitalize off this pricesurge, signaling to the world that it's open for business, but only if it benefits the country. There are two narratives: the political narrativethat mining is the savior of the economy, and then thegrassroots.

Narrative, which says mining is undermining ourlivelihoods. And we sit in between. We want to see mining contribute to the economy,but not at the expense of the Zimbabwean people. And we say we are friend to all and enemy to none. In 2009, China overtook the U.S. as Africa's largest trading partner. Growing from $121 million of traded goods in 1950to $10.5.

Billion in 2000 and now $254 billion in 2021 . Compared to the U.S., which sat at $64 billion2021. China now accounts for over 70% of global EVbattery production capacity and with over 20 years of consistent commitment toAfrican nations, it has placed itself in the right position to access the resources needed tocontinue this trend, leaving the U.S. to play catch up. In December of 2022, U.S. President Joe Biden welcomed 49 African leaders toWashington, D.C. for the country's second U.S.-African LeadersSummit and its first since the Obama administration.

The United States is all in on Africa's future. This summit was a critical step needed tore-establish U.S.-African relations, which were rocky in the previous administration. It took eight years to hold this summit. This came as a reset in relationship between theUnited States and African countries. It also was an important moment for the U.S. to signal to Africans that they take Africaseriously. Zimbabwe will use the meeting to reengage theUnited States of.

America. We hope the U.S.A. will be forthcoming. However, noticeably missing from the summit wasZimbabwe's President Emmerson Mnangagwa, who was not invited and has been under U.S. travel sanctions brought on by allegations ofcorruption and human rights abuses since 2002. In his place, Foreign Affairs MinisterFrederick Shava attended. That itself, the fact that he came is also still asignal that the U.S . is interested in keeping the door open withZimbabwe. While the U.S. pledged its commitment to Africa,the reality is tensions have been building for a.

Long time. The U.S. has been under pressure from the AfricanUnion and the Southern African Development Community to lift sanctions against Zimbabwe. These sanctions were enacted after then ZimbabwePresident Robert Mugabe launched a controversial program in 2000 that redistributedland from Zimbabwe's white minority population to its indigenous black population. The U.S. came to the summit with a trust deficit. America has not been consistent in the way thatit engages with Africa. The problem is America tends to go throughEuropean former colonial.

Powers to engage Africa. That is problematic because these countries aresovereign, independent countries. Following the sanctions, many Western governmentspulled aid and companies like Anglo American, which owns Zim Alloys, one of the country'slargest producers of chrome, sold its stake, leaving room for outside investors. Plus, the country still faces hurdles when itcomes to doing business. Zimbabwe currently has the world's highestinflation rate, peaking at 283% in 2022 and lending rates can be as high as 45%. Western investors have been a bit more skepticalwhen it comes to investing in.

An environment like Zimbabwe, where there are alot of risks. But of course, the Chinese have decided to takethe risks and put in resources. The dominant players in the mining industry priorto the 2000 have been the Western companies. When sanctions were imposed onZimbabwe by the U.S. And EU, Zimbabwe decided to change its foreignpolicy and come up with what it called the Look East policy. Western companies were pulling out. Russian and Chinese companies found a way to getin, especially in the.

Extraction of strategic minerals. The Chinese have a long standing history withZimbabwe and were one of the first countries to recognize Zimbabwe diplomatically when it gainedindependence in 1980. The Chinese have played for keeps. They showed up in Africa in the 50s during theindependence movement and stuck with those countries, regardless of where the countrystands on the political spectrum. The United States, our relationship is not alwayspermanent, and the Chinese are just consistent in that way. If you leave and you try come back tenyears later where that void that you left will be filled by somebody else.

So it's, it's important that we be consistent. And many of Zimbabwe's mines are Chinese owned,including the Bikita mine, which is the largest lithium mine in the country, and the Arcadiamine, which is considered to be one of the world's biggest hard rock lithium resources. Zimbabweans are capable of mining lithium that is close to the surface. They can do that. But the Chinese have been competing with theZimbabweans, even in areas where Zimbabwe's can do it.

The same happened with diamond mining. Zimbabweans discovered the diamonds, they startedmining. The government sent in the military and theybrought in the Chinese. So there is this feeling among Zimbabweans, thatthe government is preferring the Chinese over its own citizens. Chinese investments are pouring into Zimbabwe. In 2022 Chinese mining companies Tsingshan, China Nonferrous, and Huayou Cobalt invested nearly $1.5 billion intoZimbabwe. In the same year, Sinomine Resource Groupannounced its plan to expand its current.

Production at the Bikita Minerals mine byinvesting $200 million into building a new lithium plant. Some of the Chinese companies that are mining inZimbabwe. They are buying companies that already exist thatwere owned by, say, Australian companies or American companies, and they aretaking over from these old mining companies. While the government is signing deals with Chineseinvestors. Zimbabweans aren't naive to the issues that comewith accepting Chinese money. The negotiations of the contracts are done insecret.

Often the national interest is lost in thatsecret negotiation. The first thing we need to do is tobe transparent. We don't know the kind of concessions that Africancountries are actually giving out to the Chinese. I think there's been a lot of opacity aroundChinese investments on the African continent. It's clear that the resources belong to Zimbabwe,not the West nor the East. But how can Zimbabwe exploit its full potential? Maguwu proposes an OPEC-like cartel wheremineral-rich countries band together to regulate the price and extraction of mineralssuch as lithium.

Zimbabwe produces minerals. We need to control the prices of our minerals. We need to control the marketing of our minerals. We also need to engage other countries, evenforming cartels. We need to identify which other countries producelithium in the world. Let's form a cartel so that we can control theglobal prices of lithium. The idea itself is not far fetched. It all depends on how it's structured and whocomes into that.

Circle. If the DRC, Zambia, Chile, Indonesia, theUnited States, Peru, and Canada were to form a cartel,it gives them power, right? The power of start talking in one voice. With this developed nations that have clout onthe international stage. If, however it presented as us versus them typeof thing, then it can create a lot of animosity, so to speak, between theGreat North, and the rich, and the poor, and so on. One of Zimbabwe's biggest challenges to reachingits full potential seemed to be its politics and the narratives that surround it.

The narrative on Africa is still a narrative thatdates from the 15th century. So that lens then through which you look atAfrica, is murky. You don't see value. You don't see return for your money. You see all the risks, but not the upside thatneeds to be changed. So since colonial times, mining has always playeda significant role in Zimbabwe's economy. Zimbabwe has not been able to leveragethe kind of mineral resources that it has. I know in terms of when people talk about mineralriches in Africa, they talk about South.

Africa, Ghana and DRC, but Zimbabwe has loads ofminerals. There is massive potential for the country toreally generate hundreds of billions from its remaining mineralendowment. The elephant in the living room is corruption , nepotism, politicization, securitization, and militarization of our naturalresources. But I think if the government appoints the rightpeople into the right positions and creates theconducive environment for professionalism to thrive in thesector,.

I'm very certain that Zimbabwe has the capacityto maximize the potential from its minerals.

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