Zimbabwe is on the cusp of a transformative opportunity. As the world pivots towards green energy solutions, the demand for lithium, a key component in electric vehicle (EV) batteries, continues to surge. With the largest lithium reserves in Africa and ranking fifth globally, Zimbabwe holds a critical position in the global energy transition. However, whether the country can leverage this advantage for sustainable national development or succumb to the pitfalls of resource mismanagement remains uncertain. The insights presented in the policy paper Lithium Mining and National Economic Development in Zimbabwe: Prospects for Resource-Based National Development by the Africa Policy Research Institute provide a critical lens through which this potential turning point can be evaluated.
The global drive to cut carbon emissions and transition to sustainable energy sources has placed lithium in high demand. Lithium batteries power not only EVs but also renewable energy storage systems, making them indispensable in the quest for net-zero emissions. Zimbabwe, with its vast lithium resources, is uniquely positioned to benefit from this global rush. Over the past decade, the government has promoted foreign direct investment (FDI) to revitalise its mining sector, aiming to position mining as the backbone of its Vision 2030 agenda. This agenda aspires to elevate Zimbabwe to upper-middle-income status by fostering economic growth, creating employment, and driving industrialisation.
Several international companies, predominantly Chinese-owned, have invested heavily in Zimbabwe’s lithium mining industry. For example, Zhejiang Huayou Cobalt’s acquisition of Arcadia Lithium Mine for $422 million is emblematic of the global appetite for Zimbabwe’s resources. While these investments have created employment opportunities and contributed to the country’s export earnings, they have also raised critical questions about value addition, transparency, and local beneficiation. For decades, Zimbabwe has been trapped in a pattern of exporting raw minerals, a practice that deprives the country of higher-value economic benefits. To break free from this cycle, the government has imposed a ban on the export of unprocessed lithium. This move is aimed at fostering domestic beneficiation and compelling investors to establish processing plants within the country.
Despite its potential, the lithium sector in Zimbabwe is riddled with challenges. Allegations of corruption, resource smuggling, and uneven distribution of benefits threaten to undermine the sector’s contribution to national development. Recent exposés, including allegations of politically connected elites benefiting disproportionately from lithium deals, have fuelled public scepticism about the sector’s ability to deliver broad-based economic growth. Reports of artisanal miners being evicted from lithium-rich areas to make way for foreign companies add another layer of tension. These conflicts highlight the precarious balance between promoting foreign investment and ensuring that local communities benefit from their natural resources.
Additionally, the issue of capacity presents a significant obstacle. Zimbabwe lacks the infrastructure and technology to process lithium on a large scale. Beneficiation facilities, which could transform raw lithium into high-value products such as lithium hydroxide for battery production, require significant investment in power, chemicals, and expertise. While some stakeholders have called for regional collaboration to pool resources and technological expertise, such initiatives remain in their infancy. In the absence of these capacities, Zimbabwe continues to rely on foreign entities to process its minerals, losing substantial economic value in the process.
The global context further complicates Zimbabwe’s aspirations. Countries like China dominate the lithium value chain, from mining to processing and manufacturing lithium-ion batteries. This dominance is reinforced by extensive investments in technology and infrastructure. For example, China imports approximately 70% of global lithium compounds and refines them domestically, giving it significant control over the market. In contrast, resource-rich African countries like Zimbabwe struggle to assert themselves within this global framework, often reduced to price takers in a system they supply.
Geopolitical shifts also play a role. The ongoing conflict in Ukraine and rising tensions between Western nations and China have heightened the demand for diversified sources of critical minerals. This geopolitical landscape offers Zimbabwe an opportunity to negotiate better terms with global players. However, weak governance and regulatory frameworks often undermine such efforts, leaving the country vulnerable to exploitation by multinational corporations.
The governance of Zimbabwe’s lithium sector has come under intense scrutiny. Allegations of tax evasion by mining companies and reports of illegal exports highlight the need for robust oversight mechanisms. Transparent governance is essential not only for attracting ethical investors but also for ensuring that revenues are channelled into critical areas such as healthcare, education, and infrastructure. Without these safeguards, the lithium boom risks becoming another missed opportunity, benefiting a select few while leaving the broader population behind.
Despite these challenges, the lithium rush has brought some tangible benefits. New mining projects have created jobs in regions that previously had limited economic activity. For instance, Bikita Minerals has expanded its workforce from 200 to over 1,200 employees, while new projects such as Zulu Lithium are set to employ hundreds more. These developments contribute to reducing unemployment and stimulating local economies. However, concerns about poor working conditions, inadequate protective equipment, and non-compliance with labour laws by some foreign investors, particularly Chinese companies, threaten to overshadow these gains.
Moreover, the focus on industrialisation remains critical. Local beneficiation of lithium could create a cascade of economic benefits, from job creation to technology transfer and the development of ancillary industries. However, achieving this requires significant policy interventions. The government must incentivise the establishment of local processing facilities through tax breaks and public-private partnerships. Lessons can be drawn from Botswana’s diamond industry, where revenue-sharing agreements between the government and mining companies have yielded positive outcomes.
Regional cooperation could also play a pivotal role. Southern Africa is rich in minerals essential for battery production, including nickel, manganese, and cobalt. Collaborative efforts with neighbouring countries such as Zambia and the Democratic Republic of Congo could lead to the establishment of regional value chains, enhancing the collective bargaining power of African nations within the global market. Such initiatives would not only boost industrial capacity but also foster economic integration and mutual growth.
Zimbabwe must also address the environmental and social implications of lithium mining. Large-scale mining operations often disrupt ecosystems and displace communities, leading to long-term social and environmental costs. Implementing stringent environmental regulations and ensuring that local communities are active stakeholders in mining projects are crucial steps towards sustainable development. Public consultation and fair compensation for affected communities can help secure a social licence to operate, reducing conflicts and fostering trust between stakeholders.
In the long term, Zimbabwe must diversify its resource base to mitigate the risks associated with commodity price volatility. The fluctuating price of lithium, which has seen dramatic highs and lows in recent years, underscores the need for economic resilience. Diversifying into other sectors, such as renewable energy production and agricultural processing, can provide a buffer against the uncertainties of global commodity markets.
The lithium rush in Zimbabwe represents a defining moment in the country’s economic trajectory. The stakes are high: managed effectively, lithium mining could drive industrialisation, create jobs, and generate revenues to fund critical public services. However, without strong governance, transparent policies, and a commitment to equitable development, the sector risks exacerbating existing inequalities and perpetuating the so-called resource curse. The insights from the Africa Policy Research Institute serve as a vital roadmap, urging policymakers to navigate this opportunity with foresight and integrity. Zimbabwe’s future as a global player in the lithium market depends not only on the richness of its resources but on its ability to manage them wisely.
