Why the west feels left out in the scramble for Zim’s Lithium
Africa is home to about 30 per cent of the global mineral reserves. The continent is endowed with some of the most lucrative mineral resources. These include platinum, diamond, gold, chrome and uranium. Due to a paradigm shift towards greener energy sources and the advent of electric vehicles, lithium has also joined the top fray of lucrative minerals. Zimbabwe boasts of millions of metric tonnes of untapped lithium in its reserves.
Zimbabwe to help meet global demand for lithium.
The global demand for lithium resources in the energy industry has risen exponentially over the decade. This has led to an increase in the lithium commodity prices on the global market, opening room for African countries to draw value on the highly sought mineral. In Africa, Zimbabwe leads the pack in terms of lithium reserves and is placed on fifth position in the world. Ghana, Mali, Namibia and the Democratic Republic of Congo are some of the African countries understood to also have a significant stock of the base mineral.
Lithium is a key component in electric vehicle batteries together with chrome, cobalt, nickel, manganese and graphite. In 2015, the world extracted 540 000 metric tonnes of lithium which is earmarked to triple to around 1,5 million metric tonnes in 2025. During the year 2030, the world is projected to have extracted at least 3 million metric tonnes of lithium ore.
Zimbabwe has been mining lithium for about sixty years and the biggest lithium mine in the country is Chinese-owned Bikita Minerals, located in Masvingo Province. The giant lithium mine is understood to harbour in excess of around 12 million metric tonnes of high-grade lithium ore alone. This is not the only Chinese-owned giant mine venturing into lithium extraction since there are other lithium mines with vast reserves. Arcadia mine which is positioned in an area known to be rich in top-grade pegmatite is one of the latest developments.
China has a foothold on Zimbabwe’s lithium.
The Asian superpower holds several lucrative mining concessions for various minerals in Zimbabwe including lithium. From 2005, China has invested over US$2 billion in the Southern African country’s mining sector only. With further exploration, China looks to further its investment in the sector in line with new findings. The possibility of more lithium findings in Zimbabwe are huge in a territory that is known to harbour over 60 types of minerals including the priciest ones.
China stands to benefit more from Zimbabwe’s lithium reserves as Harare applies the ‘Look East’ policy under President Emmerson Mnangagwa. This was primarily due to the West’s failure to embrace the second republic over lack of genuine political reforms and insistent human rights abuses.
When faced with a tough diplomatic offensive from the West, President Mnangagwa opted to continue with his predecessor’s foreign policy. The late former President Mugabe was highly critical of the West for imposing sanctions on smaller nations and attempting at influencing the politics of the day.
In 2009, China took over from the U.S. as Africa’s largest trading partner. In 1950, China traded with Africa goods worth US$121 million and this shoot to US$10.6 billion in 2000. In the past two decades, Beijing has now traded US$254 Billion with African states compared with the U.S. which settled at US$62 billion during the same time frame.
China accounts for 70 per cent of the world’s electric vehicle battery production capacity. Given its watertight relations with African states, its foothold in this industry is likely to be maintained. This leaves the U.S. in a precarious position with limited options to explore the mineral resource elsewhere. Realising its exclusion, the Biden administration committed to supporting Africa’s future during the December 2022 U.S-Africa Summit.
The U.S. is not forthcoming.
One of the reasons why U.S. is being left out is because when it wants to negotiate with Africa, its diplomatic stance is characterised by engagements with former colonial powers on behalf of former colonies. This undermines the territorial sovereignty of those African states and presents a subtle violation of international law.
Chinese investors are not risk averse.
Zimbabwe’s economy is infamous for inflation, political uncertainties and lack of solid property rights. Naturally, such an investment destination scares way serious investors. The Chinese investors are willing to take the risk and that is the prime reason why the returns are high. Chinese companies including Huayou Cobalt are continuing to invest in Zimbabwe’s mining sector despite the perceived economic hurdles.
Zimbabwe has moved to reclaim its lithium value.
The country recently introduced a raft of laws to ban the exportation of raw or unprocessed lithium ore. This was meant to curb revenue leakage and illicit smuggling of lithium to the detriment of the country. In the wake of this exercise, it is yet to be observed whether the country’s goal of a US$12 billion mining sector by 2030 will be attainable.
Sources: CNBC; Africa Post; Herald