As the second largest continent, Africa is home to 30% of the world's mineral
reserves. It holds 40% of the world's gold and at least 90% of its chromium
and platinum. It also has the largest reserves of cobalt, platinum, uranium, and
diamonds. With the global demand for batteries rising and the search for new sources of
energy, the world is reliant on minerals from African countries.
But, many African leaders are looking to reclaim control of the continent's resources.
We need to process our lithium and get value.
Lithium is a critical component found in electric vehicle batteries and reserves have been
discovered throughout the continent, with Zimbabwe, Namibia, Ghana, Democratic
Republic of the Congo and Mali all having notable supplies.
Most automakers have announced a transition to electric, meaning the demand for batteries and the
minerals in them is going to skyrocket.
In 2021, the world mined 540,000 metric tons of lithium
. By 2025, the demand is expected to triple to 1.5 million metric tons,
and by 2030, 3 million metric tons.
Zimbabwe has been mining lithium for 60 years and the government estimates that its Chinese owned
Bikita mine, located 300km south of the capital Harare, has about
11 million metric tons of lithium resources alone.
Mining in Zimbabwe is very politicized.
It's very securitized and sometimes it's militarized.
In Zimbabwe, there are more than 80 state-owned Chinese enterprises, which have amassed a
total of $10.4 billion in investments and contracts in the country from
2005 to 2020.
Meanwhile, the U.S.
has fallen behind and relations with the nation, have been shaky.
I think they already taken Africa for granted for so long and I think now is the
time to say maybe it's time to wake up.
In the future, African countries like Zimbabwe will play an important role in the mining of
battery mineral resources.
In 2020, Zimbabwe was a sixth largest producer of lithium, and the country is expected
to become one of the world's largest lithium exporters.
CNBC explores Zimbabwe's mining sector to find out why China has a stronghold on the country
and why it matters to the U.S.
Whoever comes to invest in the country must be told that, number one,
you have come to Zimbabwe.
Respect the Zimbabwean people.
The world is changing and we need to get there.
With or without us, Africa will move forward.
Africa has other options.
Zimbabwe is rising step by step,
brick by brick and stone upon stone.
No one, no one can stop that
movement.
Zimbabwe is home to over 60 different minerals, including all five of the critical minerals needed
to build electric vehicle batteries: lithium, cobalt, manganese, nickel and
graphite. Minerals play an important role in the economic growth of Zimbabwe, accounting
for 60% of the country's total exports, with the mining sector contributing to
11% of the national GDP.
In 2023, it's expected to grow by 6% and is valued at 12
billion U.S. dollars.
Mining has played a critical role in terms of sustaining growth in the economy and we've seen a
lot of investments within the mining sector over the past
few years. For us to realize the full potential from the mining sector, it means we have to move
up the value chain.
Zimbabwe primarily mines gold, platinum and diamonds, but lithium prices have
skyrocketed. The price in May of 2022 was seven times higher than the price at the
start of 2021.
Zimbabwe is looking to capitalize off this increase and the country could potentially meet
20% of the world's demand for lithium once it fully exploits its known resources.
Lithium has been discovered in many parts of the country,
close to the surface.
The villagers have been mining that lithium and selling to
merchants, and that helps in alleviating rural poverty.
Chinese companies Huayou Cobalt and Sinomine Resource Group, owned both the country's most
important and resource rich lithium mines.
When we invest in the Chinese and allow them to come and do what Zimbabweans are capable
of doing, we are building China, not Zimbabwe.
Zimbabweans are saying leave room for the Zimbabwean people where the Zimbabweans are
able to mine and invest in the local economy.
CNBC reached out to the Chinese embassy in Zimbabwe, which declined to comment on the
statement.
The strategy of most of the new investors in the lithium mining
industry is to go towards mining solid battery-grade
lithium. I don't think the Chinese compete with artisanal and
small-scale miners.
The Chinese have served as a middleman.
Artisanal miners were doing the mining and then they would sell to the Chinese
mining companies.
So, there was some kind of a relationship, a working relationship.
Artisanal mining or small scale mining plays a critical role in the livelihood of over 1 million
Zimbabweans. It's a largely informal method of mining, where individuals use basic tools
to extract minerals.
It's estimated that the government has lost nearly $2 billion in minerals smuggled across the
border through artisanal mining leakages.
We cannot, as a country continue to be exporting primary
products, including concentrates and ores.
In December 2022, the country passed a Base Mineral Export Control Act, which banned
the export of raw lithium.
However, companies that are developing mines and processing plants in Zimbabwe are exempt from this
ban. This includes Chinese firms Huayou Cobalt, Sinomine Resource Group, and
Chengxin Lithium Group, which have invested $678 million into
lithium projects.
Any government in the world was bound to react when your resources are just
flying in all directions.
However, the lithium concentrate is still being exported
lawfully out of the country.
So I think governments simply wanted to control the
lithium that was being extracted by artisanal miners, which
was not being accounted for, and it was being smuggled out of the country.
Artisanal miners were the worst affected by the ban because they had
already accumulated loads of raw lithium that they were preparing to sell and they
couldn't sell their lithium.
They suffered more than any other person.
With the new act passed.
Zimbabwe is looking to capitalize off this price surge, signaling to the world that it's open for
business, but only if it benefits the country.
There are two narratives: the political narrative that mining is
the savior of the economy, and then the grassroots
narrative, which says mining is undermining our livelihoods.
And we sit in between.
We want to see mining contribute to the economy, but not at the
expense of the Zimbabwean people.
And we say we are friend to all and
enemy to none.
In 2009, China overtook the U.S.
as Africa's largest trading partner.
Growing from $121 million of traded goods in 1950 to $10.5
billion in 2000 and now $254 billion in 2021
. Compared to the U.S., which sat at $64 billion 2021.
China now accounts for over 70% of global EV battery production capacity and
with over 20 years of consistent commitment to African nations, it has placed itself in the right
position to access the resources needed to continue this trend, leaving the U.S.
to play catch up. In December of 2022, U.S.
President Joe Biden welcomed 49 African leaders to Washington, D.C.
for the country's second U.S.-African Leaders Summit and its first since the Obama
administration.
The United States is all in on Africa's future.
This summit was a critical step needed to re-establish U.S.-African relations, which were
rocky in the previous administration.
It took eight years to hold this summit.
This came as a reset in relationship between the United States
and African countries.
It also was an important moment for the U.S.
to signal to Africans that they take Africa seriously.
Zimbabwe will use the meeting to reengage the United States of
America. We hope the U.S.A.
will be forthcoming.
However, noticeably missing from the summit was Zimbabwe's President Emmerson Mnangagwa,
who was not invited and has been under U.S.
travel sanctions brought on by allegations of corruption and human rights abuses since
2002. In his place, Foreign Affairs Minister Frederick Shava attended.
That itself, the fact that he came is also still a signal that the U.S
. is interested in keeping the door open with Zimbabwe.
While the U.S. pledged its commitment to Africa, the reality is tensions have been building for a
long time.
The U.S. has been under pressure from the African Union and the Southern African Development
Community to lift sanctions against Zimbabwe.
These sanctions were enacted after then Zimbabwe President Robert Mugabe launched a
controversial program in 2000 that redistributed land from Zimbabwe's white minority
population to its indigenous black population.
The U.S. came to the summit with a trust deficit.
America has not been consistent in the way that it engages with Africa.
The problem is America tends to go through European former colonial
powers to engage Africa.
That is problematic because these countries are sovereign, independent countries.
Following the sanctions, many Western governments pulled aid and companies like Anglo American,
which owns Zim Alloys, one of the country's largest producers of chrome, sold its stake,
leaving room for outside investors.
Plus, the country still faces hurdles when it comes to doing business.
Zimbabwe currently has the world's highest inflation rate, peaking at 283% in
2022 and lending rates can be as high as 45%.
Western investors have been a bit more skeptical when it comes to investing in
an environment like Zimbabwe, where there are a lot of risks.
But of course, the Chinese have decided to take the risks
and put in resources.
The dominant players in the mining industry prior to the 2000 have been the
Western companies. When sanctions were imposed on Zimbabwe by the U.S.
And EU, Zimbabwe decided to change its foreign policy and come up
with what it called the Look East policy.
Western companies were pulling out.
Russian and Chinese companies found a way to get in, especially in the
extraction of strategic minerals.
The Chinese have a long standing history with Zimbabwe and were one of the first countries to
recognize Zimbabwe diplomatically when it gained independence in 1980.
The Chinese have played for keeps.
They showed up in Africa in the 50s during the independence movement and stuck with
those countries, regardless of where the country stands on the political spectrum.
The United States, our relationship is not always permanent, and the Chinese are just consistent in
that way. If you leave and you try come back ten years later where that void
that you left will be filled by somebody else.
So it's, it's important that we be consistent.
And many of Zimbabwe's mines are Chinese owned, including the Bikita mine, which is the largest
lithium mine in the country, and the Arcadia mine, which is considered to be one of the world's
biggest hard rock lithium resources.
Zimbabweans are capable of mining lithium that
is close to the surface.
They can do that.
But the Chinese have been competing with the Zimbabweans, even
in areas where Zimbabwe's can do it.
The same happened with diamond mining.
Zimbabweans discovered the diamonds, they started mining.
The government sent in the military and they brought in the Chinese.
So there is this feeling among Zimbabweans, that the government is
preferring the Chinese over its own citizens.
Chinese investments are pouring into Zimbabwe.
In 2022 Chinese mining companies Tsingshan, China Nonferrous, and
Huayou Cobalt invested nearly $1.5 billion into Zimbabwe.
In the same year, Sinomine Resource Group announced its plan to expand its current
production at the Bikita Minerals mine by investing $200 million into building a new
lithium plant.
Some of the Chinese companies that are mining in Zimbabwe.
They are buying companies that already exist that were owned by, say, Australian
companies or American companies, and they are taking over from these
old mining companies.
While the government is signing deals with Chinese investors.
Zimbabweans aren't naive to the issues that come with accepting Chinese money.
The negotiations of the contracts are done in secret.
Often the national interest is lost in that secret
negotiation. The first thing we need to do is to be transparent.
We don't know the kind of concessions that African countries are
actually giving out to the Chinese.
I think there's been a lot of opacity around Chinese investments on the African continent.
It's clear that the resources belong to Zimbabwe, not the West nor the East.
But how can Zimbabwe exploit its full potential?
Maguwu proposes an OPEC-like cartel where mineral-rich countries band together to
regulate the price and extraction of minerals such as lithium.
Zimbabwe produces minerals.
We need to control the prices of our minerals.
We need to control the marketing of our minerals.
We also need to engage other countries, even forming cartels.
We need to identify which other countries produce lithium in the world.
Let's form a cartel so that we can control the global
prices of lithium.
The idea itself is not far fetched.
It all depends on how it's structured and who comes into that
circle. If the DRC, Zambia, Chile, Indonesia, the United
States, Peru, and Canada were to form a cartel, it gives them power,
right? The power of start talking in one voice.
With this developed nations that have clout on the international stage.
If, however it presented as us versus them type of thing, then it can create
a lot of animosity, so to speak, between the Great North, and the
rich, and the poor, and so on.
One of Zimbabwe's biggest challenges to reaching its full potential seemed to be its politics and
the narratives that surround it.
The narrative on Africa is still a narrative that dates from the 15th century.
So that lens then through which you look at Africa, is murky.
You don't see value.
You don't see return for your money.
You see all the risks, but not the upside that needs to be changed.
So since colonial times, mining has always played a significant role in Zimbabwe's
economy. Zimbabwe has not been able to leverage the kind of mineral
resources that it has.
I know in terms of when people talk about mineral riches in Africa, they talk about South
Africa, Ghana and DRC, but Zimbabwe has loads of minerals.
There is massive potential for the country to really generate
hundreds of billions from its remaining mineral endowment.
The elephant in the living room is corruption
, nepotism, politicization,
securitization, and militarization of our natural resources.
But I think if the government appoints the right people
into the right positions and creates the conducive
environment for professionalism to thrive in the sector,
I'm very certain that Zimbabwe has the capacity to
maximize the potential from its minerals.