ZIMBABWE’S lithium industry has committed nearly US$1.5 billion to local processing infrastructure, but the sector is buckling under a crushing tax burden that threatens to undermine the very beneficiation drive the government is championing, industry leaders have revealed.
By Rudairo Mapuranga
Speaking on behalf of the Lithium Producers Association during the Mine Entra Beneficiation and Value Addition Symposium in Bulawayo, association chairman Innocent Rukweza, who is also Mutapa Energy Resources CEO, detailed the sector’s investment commitments and issued an urgent plea for fiscal relief.
“We are paying 40 per cent of our sales to the government,” Rukweza said, echoing concerns expressed by producers across the industry. “We try our best to contribute, but we feel we are treated badly.”
US$1.45 Billion Committed, US$3.2 Billion Target by 2030
Rukweza outlined the industry’s collective investment picture, stating that lithium producers have together committed approximately US$1.45 billion towards local beneficiation infrastructure. Of this, US$2 billion has already been achieved, with the remaining US$1.45 billion in the pipeline.
The investments are already bearing fruit. In April 2026, Prospect Lithium Zimbabwe exported Africa’s first locally produced lithium sulphate from its US$400 million Arcadia plant. Two more sulphate plants are under construction: Sinomine’s US$500 million facility at Bikita Minerals and a third facility expected to come online by the end of 2027. Kamativi Mining Company has invested more than US$200 million in its lithium sulphate project.
“The pricing of the lithium products themselves, as you go up and move up the value chain, means that you’re getting more value,” Rukweza explained.
Raw spodumene concentrate currently sells for around US$250 per tonne, while lithium sulphate commands between US$18,000 and US$22,000 per tonne, a value multiple of up to seven times higher. The transition from concentrate to sulphate represents a revenue increase of five to seven times per tonne of raw material processed.
“Up to 2030, according to our projections, the lithium industry will be registering a big turnover, US$3.2 billion,” Rukweza told delegates.
The Tax Burden: A Crushing Reality
But the industry’s ability to reach that target is under threat. Producers say nearly 40 percent of their sales revenue is absorbed by taxes and levies, leaving little room for reinvestment in processing infrastructure.
The tax structure includes a 10 percent export tax on unbeneficiated lithium, 7 percent royalties, a 3 percent community development levy, a 1 percent marketing fee payable to the Minerals Marketing Corporation of Zimbabwe, and 15.5 percent VAT on applicable transactions. When combined with corporate income tax, payroll obligations, and foreign currency retention requirements, the total burden approaches 40 percent before accounting for operational costs such as labour, electricity, and equipment.
Rukweza called for a review of the tax regime, noting that Zimbabwe’s producers are on “the high side” compared with competitors globally.
“Like I said, we are putting in upwards of 1.4 billion,” Rukweza said, referring to industry investment. “Obviously, there are some incentives that the policymakers would also need to look into.”
By-Products: Tantalum, Niobium, and Caesium
Beyond lithium, Rukweza highlighted opportunities to extract value from associated minerals. Projects valued at more than US$80 million are aimed at recovering tantalum, niobium, and caesium from lithium operations.
Research presented at a recent Zimbabwe Environmental Law Association breakfast meeting estimated that Zimbabwe lost approximately US$400 million in unreported tantalum and US$30 million in unreported caesium from lithium concentrate exports. The Government has since introduced mandatory declaration of all minerals before export and requirements for assay laboratories at each producing mine.
A Sector Under Pressure
The industry has already weathered significant turbulence. When global lithium prices crashed, the sector lost more than 1,000 direct jobs. Most operations struggle when lithium carbonate falls below about US$17,000 to US$18,000 per tonne.
Chinese investors now control more than 80 percent of Zimbabwe’s lithium production, leaving the sector heavily exposed to external capital flows and market dynamics. Despite this, producers are pressing ahead.
Rukweza said the industry remains “committed to the story of lithium” and determined “to make it better than what it is as a collective”. He has also led a formal request to the Government to delay the January 2027 export ban on spodumene concentrate by approximately five months, noting that among seven major producers, only Huayou Cobalt’s lithium sulphate plant has been completed and commissioned.
“Below that level, it becomes very difficult to operate,” Rukweza said of the lithium price floor. “We are not seeking to evade our beneficiation obligations, but sincerely request permission to complete the ongoing construction work.”
Zimbabwe’s lithium sector stands at a crossroads. Billions have been invested. Processing plants are rising. The country is on track to become Africa’s only nation with multiple lithium sulphate operations. But the tax burden, infrastructure constraints, and volatile commodity prices continue to test the industry’s resolve.
As Rukweza put it, “This is an infant that is going to mature at one point.” Whether it matures into a US$3.2 billion powerhouse or falters under fiscal pressure depends on whether the Government and industry can find common ground on tax relief, power supply, and a stable policy environment.
“These are some of the things that we are sharing on the beneficiation story,” Rukweza concluded.
