Saudi Arabia’s recent announcement of a joint venture (JV) between Aramco, the world’s largest oil company, and the state-owned mining company Ma’aden highlights a model Zimbabwe can emulate to drive economic growth and reduce its reliance on external sources of capital. The partnership, aimed at extracting lithium from high-concentration deposits, aligns with Saudi Arabia’s Vision 2030 to tap into $2.5 trillion in untapped mineral resources and increase mining’s contribution to GDP.
By Rudairo Mapuranga
Zimbabwe, rich in minerals such as gold, lithium, and coal, could similarly benefit from investing in mining exploration and opening its own state-controlled mines. By strategically utilizing its mineral wealth, the country could significantly reduce government tax dependency while allowing local businesses to grow. Such investments would generate profits that could be reinvested into state-owned industries or even the agricultural sector, creating a more sustainable economic framework.
Exploration: The Key to New Wealth
Saudi Arabia’s approach demonstrates the importance of prioritizing exploration. The country’s push to discover recoverable gold and copper deposits in the Arabian Shield through the world’s largest single-jurisdiction mineral exploration program shows the potential rewards of investment in new mining ventures. Zimbabwe could similarly increase funding for geological surveys and exploration, targeting key mineral-rich areas like Kamativi, which has seen past investments of under US$0.5 billion.
Zimbabwe’s Minister of Finance should ensure that exploration becomes a priority in the national budget, with the goal of opening a new state-controlled mine every year. By taking ownership of these ventures, Zimbabwe could channel profits back into the national economy, benefiting all citizens.
Building State-Owned Mines for Future Growth
Kamativi provides an excellent example of how targeted investment in exploration and mining can yield economic benefits. The investment required to restart mining operations there was less than US$0.5 billion, showing that even with modest funding, Zimbabwe can unlock substantial value from its mineral reserves. If the government commits to developing a new mine each year, the revenue generated could significantly alleviate the tax burden on citizens and businesses.
Furthermore, Zimbabwe has vast lithium deposits, among other critical minerals, which are essential for the global green energy revolution. By developing its own mining projects, Zimbabwe can better position itself in this booming sector, reducing reliance on foreign companies that often dominate the mining space.
Channelling Profits to Industry and Agriculture
The profits from state-owned mines could be used to support other vital sectors of the economy. Just as Saudi Arabia is building an electric vehicle manufacturing hub as part of its mining strategy, Zimbabwe could establish state-owned processing plants that would refine its minerals, adding value before export. This would create jobs and increase export revenues.
Additionally, a portion of mining profits could be directed toward agricultural development, an area in which Zimbabwe has tremendous potential. By investing in state-owned farms or providing financial support to private farmers, the government could boost food production and improve food security.
Reducing Tax Burdens and Stimulating Business Growth
One of the key benefits of state-owned mining is that it could significantly reduce the government’s need to levy heavy taxes on other sectors. With mining profits funding national projects, Zimbabwe could lower taxes on local businesses, allowing them to thrive and expand. This would stimulate further growth in industries such as manufacturing, services, and technology, creating a more diversified and resilient economy.
