Where are Zimbabweans as foreign countries take over futuristic mining deals?
The purchase of Arcadia Lithium mine by Chinese giant Zhejiang Huayou Cobalt invoked fiery debate on Mining Zimbabwe’s Facebook page generating over 100+ comments in the first hour of publishing.
Many were sceptical of the country’s natural resources being purchased by foreign investors which the majority warned the country will regret in the future.
The article as I write this is currently sitting at 68 883 engagements and comments at 503.
Huayou, the world’s biggest cobalt producer, another battery metal, will pay US$388.8 million for Australia-listed Prospect Resources Ltd’s 87 per cent stake in Arcadia owner Prospect Lithium Zimbabwe a deal that will be signed tomorrow.
Zhejiang Huayou will pay another US$44.2 million for the 6per cent stake held by Zimbabwean professor Kingston Kajese and the 7 per cent held by Tamari Trust, which previous Prospect filings show is linked to Paul Chimbodza, Executive director of Prospect Lithium Zimbabwe.
Zimbabweans had this to say
Manny Chavura said, “This is worrying. The state should’ve bought a stake so that Zim continues to have a bit of say in such an increasingly important resource,”.
Melusi Enock Kepekepe added his voice saying, “Country mortgaged for a song to line a few pockets. They will recoup this in less than 4 months. Zimbabwean geologists, economists should be consulted,”.
Kevin Makumbe said, “We should not sell lithium mines, instead we should get battery manufacturers to set their factories here in Zimbabwe so that we export finished goods to the international market. From this investment, the Chinese are going to make Trillions”.
Responding to a question by Tapiwa Kange, Shepherd Nyathi said, ”the issue is about who owns Arcadia mine. It’s a private entity and duly registered and operating according to our laws. You don’t just wake up and change laws because suddenly lithium is important. You follow your laws. If you so wish you can apply and open your mine as stipulated in our laws. But then you don’t have the capacity to mine. So let those who have do it. Let those who can buy mines buy,”.
Mernard Gambe contributed saying, “What’s the agreement? Is it not between 2 private parties? Prospect Resources and the Chinese company. The former being the owner. Probably they find it worthwhile to sell at this amount. This is purely business. If I can get such an amount without expending anything then that’s a deal of the time. That’s what businesses do all over and it’s all about themselves. They are not created for charity or for a welfare of some third party,”.
One of the most interesting comments came from Michael Monson who asked, “Why can we as Zimbabweans not run our own mines, manufacture our own goods and be the breadbasket of Africa that we once were, the Jewel of Africa?.
Clean Energy
A new energy race is underway between the U.S. and China which echoes of past wars over oil. The countries are now fighting to procure new sources of lithium – the key to transitioning away from fossil fuels to clean energy, Florida-based technical analyst, market researcher, educator and trader, James Hyerczyk said.
As the world is moving toward clean energy we now live in an era defined by advancements in various forms of technology. Britain Prime Minister Boris Johnson in 2020 announced that new cars and vans powered wholly by petrol and diesel will not be sold in the UK from 2030.
Boris’ announcement placed Zimbabwe at the centre pedestal since that makes it a key global player in the revolution as it is the 5th biggest lithium producer in the world.
Countries with proposed bans or implementing 100% sales of zero-emissions vehicles include China, Japan, the UK, South Korea, Iceland, Denmark, Sweden, Norway, Slovenia, Germany, Italy, France, Belgium, the Netherlands, Portugal, Canada, the 12 U.S. states that adhered to California’s Zero-Emission Vehicle (ZEV) Program, Sri Lanka, Cabo Verde, and Costa Rica.
In 2018, Denmark proposed an EU-wide prohibition on petrol and diesel cars, but that turned out to be contrary to EU regulations. In October 2019, Denmark made a proposal for phasing out fossil fuel vehicles on the member state level by 2030 and was supported by 10 other EU member states.
In July 2021, the European Commission proposed a 100% reduction of emissions for new sales of cars and vans as of 2035.
Lithium production in Zimbabwe
Interestingly Zimbabwe globally is the 5th largest lithium producing country, yet only Bikita Minerals Mine is in production. Several lithium projects are currently being developed in the country with Prospect Resources’ Arcadia Project and Premier African Minerals’ Zulu project soon to benefit from the lithium boom. Additional miners like the Bindura based Mirroplex Lithium mine will likely see Zimbabwe potentially advancing to becoming the 3rd biggest lithium producer in the world.
Where are Zimbabweans as foreign countries take over futuristic mining deals?
In August of this year government availed land to five companies intending to establish integrated mining and ferrochrome smelters in the country, but the majority of the companies, if not all, are foreign-owned, raising the question, just like the lithium deal why are local companies or investors are not taking up such opportunities?
At the time Mining Zimbabwe spoke to the Chairman of the Portfolio Committee on Mines and Mining Development, Edmond Mkaratigwa, who said, “I am asking the same question also, where are we? Business is about capital and like all professions, it’s about your voluntary initiation,”.
“Mostly our people are able to mine on small scale which is why I always advance that there should be a national growth strategy for our small scale miners so that they also upscale their operations.”
“Generally, I also know that all those are names of companies and I have not yet managed to have the opportunity to know the share ownership structure for me to conclusively endorse the view that it’s wholly foreign-owned in the sense of shareholding.”
“In the same mind, opportunities are there but usually capital capacity is the challenge. We need to amalgamate our capabilities and capacities so that we can migrate to larger investment and not rely on selfish and individualized investment models,” Mkaratigwa said.
Popular Mining journalist Rudairo Mapuranga said Prospect has always been open about its intentions yet there was no talk of interests locally.
“It’s public knowledge that Prospect Resources has been looking for a solid takeoff agreement to kick start the project. People never talked about the prospect of coming on board to fund the lithium mine for the benefit of the country. Now that the Chinese who we know very well are after wealth have now taken over the Arcadia mine, people start to complain. Where have we been? Business is not about indigenous empowerment and all these other fancy words but Capital. We need to raise capital, take the risk and own our own minerals. We must not only be good at talking and complaining but not risk and action-oriented. Raising capital cannot be that hard if we are willing to be the owners of futuristic projects like this one.