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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.

ZIMBABWE must build local capital and forge regional partnerships if it is to escape the resource curse and achieve genuine industrialisation through its vast mineral wealth, a renowned mining economist and policy expert has declared.

By Rudairo Mapuranga

WATCH

Dr Paul Jourdan of the University of the Witwatersrand’s School of Economic and Business Sciences and a former senior official in Zimbabwe’s Ministry of Mines and Mining Development, who worked closely with liberation movement comrades during the struggle, delivered a characteristically blunt assessment at the Mining Exploration Symposium in Bulawayo.

“I know of no case where foreign capital developed the linkages in industrialisation. There is no example in the world of resource-based industrialisation with foreign capital,” Jourdan told delegates.

Drawing heavily on the African Union’s Africa Mining Vision – which he described as “about all the linkages” that together form the mining value chain – Jourdan argued that Zimbabwe’s mineral resources must be the foundation for a broader industrialisation strategy that extends far beyond the life of any individual mine.

The Mining Value Chain: Backwards and Forward Linkages

Jourdan, who co-authored the influential Mining Sector Policy Study for Zimbabwe and has decades of experience across Africa, stressed that opportunities lie not in the mine itself but in what surrounds it.

“The opportunities all come out of the industry. The opportunities are developing the mining industry, intermediates industry, manufacturing industry. The backward linkages into imports, the capital goods industry,” he said.

He pointed to the mining equipment and consumables on display outside the conference venue, asking why Zimbabwe could not produce more of them locally.

“You saw the COPs out here, made by Sandvik, made by New Holland. We all want to make COPs. But we can’t have a COP plant in every single country. So we need to work together,” he said, calling for regional collaboration similar to that seen in Europe.

The Case for Local Capital

Jourdan’s central thesis – that local capital is essential for resource-based industrialisation — challenges the prevailing model of foreign direct investment that has dominated African mining for decades.

He cited historical examples from the United States, Scandinavia, and Germany, where industrialisation was driven by domestic capital rather than foreign investment.

“Foreign capital: one, they want to be rewarded. They will take the rent out. Two, they have international supply chains and global purchasing power. They’re not nasty. They just do the best for their shareholders,” he said.

Instead, he urged Zimbabwe to build local capital by using mining laws and tax policies to require value addition, local content, human capital development, research and innovation, and local firm development.

“Experience internationally shows you only get the mining value chain if it’s local capital,” he said.

Price Discovery Through Auctions

Jourdan proposed a novel auction mechanism for mining rights that would allow Zimbabwe to capture more value and ensure that investors deliver tangible benefits.

In his model, bidders would compete not only on price but on local content commitments, value addition targets, research and development spending, and human capital development.

“Then you open the envelope in front of the press, so you don’t get, you know, Liberia where a lot of things happen. You do it in front of the press, you project it, and you start right there, so everyone knows who the winner is,” he said.

This would create a transparent process that encourages competition and ensures that the country benefits beyond the extraction of raw resources.

Spatial Linkages: The Mining Corridor Concept

Jourdan called for a shift from viewing mines as isolated production sites to developing integrated mining corridors that unlock broader development.

He cited a project looking at Moatize, where a double rail corridor was found to be viable at just US$0.02 per tonne-kilometre, potentially opening up agriculture, trade, and regional integration — a cost that would have allowed Zimbabwe to reach the coast with freight rates of just US$8 per tonne.

“Can we work together and then extend that into the main corridor and development zone, use mining to underpin sustainable agriculture? Agriculture can go for thousands of years. Mining is mined out,” he said.

He urged Zimbabwe to work closely with Mozambique, recalling the success of the Maputo Corridor, which attracted US$5 billion in investment between South Africa and Mozambique.

“Can we go back to the struggle days — Chimoio, Tete? Can we work together?” he asked.

A Governance Challenge: Ministers Must Work Together

In characteristically blunt language, Jourdan identified a fundamental barrier to implementing the Africa Mining Vision: ministerial silos.

“Ministers don’t like working together. Ministers are all doing jobs for an audience of one, the President. So they don’t naturally work together very well,” he said.

His solution: either merge the mining and industry ministries, as in Norway and Sweden, or create a ministerial cluster under the President with a dedicated monitoring and evaluation secretariat.

“We need all elements to work together. The leaders must work for the opportunity,” he said.

Lateral Diversification: Beyond the Mine

Jourdan introduced the concept of “lateral migration” — where industries developed for mineral processing can migrate into non-resource sectors when mines close.

“When the mines die, all of these industries don’t die too. Through those technologies, the engineers, the expertise, you get lateral migration, where those industries that were doing mineral processing start doing municipal water. They migrate laterally into non-resource sectors so that we have sustainability when we only have the hole in the ground at the end of the mine,” he said.

This, he argued, is the true measure of sustainability – creating industries that outlast the finite mineral resources that spawned them.

Jourdan’s ties to Zimbabwe run deep. During the liberation struggle, he worked closely with Zimbabwean comrades when the Voice of Zimbabwe radio broadcast into Rhodesia from Francistown, Botswana. Later, he was invited to give talks in the country.

“My background during the struggle, I worked closely with Zimbabwean comrades when we had the Voice of Zimbabwe radio broadcasting into what was then Rhodesia from Francistown, Botswana,” he recounted.

His deep knowledge of the country and its mining sector, combined with his extensive experience across Africa, gives his message particular weight.

The Path Forward

Jourdan’s presentation provided a comprehensive framework for mineral-led industrialisation:

• Phase 1: Use FDI initially, but move to local capital as quickly as possible.
• Phase 2: Move from resource exports to value addition.
• Phase 3: Use resource infrastructure to catalyse broader development, including agriculture.
• Phase 4: Move from unskilled labour to skilled labour and local skills development.
• Phase 5: Move from importing technologies to developing them locally.
• Phase 6: Obligate miners to spend a percentage of sales on local technology development.

“Start with resource transfer to make the tax base, then become independent of resources and move to complex taxes in industry management,” he said.

Conclusion

Jourdan’s message to Zimbabwe’s mining industry and policymakers is clear: mineral wealth is not destiny. Without deliberate policy, local capital development, and regional cooperation, Zimbabwe will remain a raw material exporter while the value is created elsewhere.

But with the right policies, he argued, Zimbabwe can follow the path of successful resource-based industrialisers such as Norway, Sweden, and Germany.

“Ministers don’t like working together,” he said. “But if we don’t start working together on most of these opportunities, we won’t have a free trade economy.”