A STRING of multinational investors, who have made forays into Zimbabwe’s huge lithium endowment, are currently reviewing production targets before approaching government, a senior government official has said.
Mines and Mining Development deputy minister Polite Kambamura told businessdigest that following fast-paced takeovers in the final quarter of last year, targets had shifted because new entrants had bigger capacities to exploit the resource.
He said the government was waiting for new investors’ work plans before revising current and projected lithium targets.
Lithium has been the latest of exciting discoveries on the resources front in the past decade, powered by high demand in electric vehicle battery production.
It has replaced the hype that characterised platinum resource discoveries from the early 2000s, when giants like Zimplats came into the picture.
Following the entry of mostly junior resources firms into the lithium industry from 2018, there has been an influx of big investors, who have pounced on green fields under development.
It is not clear if this is a strategy by small investors in Zimbabwe to buy cheap assets and sell them off at massive profits.All lithium assets have been taken over by global giant led by Chinese deal makers, who are now completing exploration and sinking shafts.
New investors have pounced on everything from Zulu Lithium near Bulawayo to assets in Bikita and Harare in one of the most aggressive changeovers.
Chinese investors poured US$570 million into Zimbabwe’s lithium mines in the last quarter of 2021.
They have been making serious inroads to feed into their battery production industries, following steeper demand since electric vehicle (EV) manufacturing increased.
Kambamura said current projections of US$500 million revenues from the industry by 2023 may have been affected by shareholder changes.
He said a clear picture would only emerge after new internal production targets are submitted to government.
“We have a target of US$500 million from the lithium sector,” Kambamura said last Friday in the interview.
“Actual production targets in terms of tonnage comes from the individual mines and as you may be aware Arcadia Prospects Zimbabwe was bought by Zhejiang Huayou Cobalt from China and they haven’t come to the ministry yet with regards to their work schedule and plan to develop the lithium in Goromonzi.
“At Bikita Lithium, there is a transaction, which is going on by a new investor and they are yet again to come to the ministry to show us their production targets, expansion drive and so forth.
“There is massive exploration that is ongoing in the country so it is difficult now to quantify even the reserve of lithium or the production targets because the companies are still working on that so it’s still work in progress,” he said.
The deputy minister said the government was offering a cocktail of incentives to attract investment into lithium mines.
“The government came up with rebates, free duty on capital equipment and tax breaks for foreign investment in the country. These are some of the incentives that the government came up with. Registration will be done promptly,” Kambamura added.
Last year’s climate change summit in Scotland saw world leaders call for countries to reconfigure and adopt technologies that can boost clean energy production, thereby unlocking opportunities, among them, investments in lithium mining.
The trend has caught the eye of the multinationals.
According to an African Mining Markets report, Zimbabwe is the leading country in Africa in lithium production.
Battery metal specialists say the drive for clean technology initiatives and off-grid power storage has created an enormous demand for lithium batteries and electric vehicles in recent years.
This demand is expected to accelerate rapidly.
“Government opened doors to this by coming up with several investor friendly policies. Government is coming up with a massive exploration drive not only for the lithium sector, but on all other minerals in an effort to quantify the mineral reserves that we have,” he said.
However, there have been fears that Zimbabwe’s lithium mines are being sold for a song.
Experts have said with international lithium prices rocketing and the mineral being declared one of the most strategic commodities, Zimbabwe’s parliament should take a lead in making sure future generations would not be prejudiced.
According to Trading Economics, lithium carbonate prices in China extended their rally to US$78 180 per tonne in the third week of March.
This marked a gain of over 75% so far this year.
Lithium is used to make batteries for electric car vehicles, and demand is seen rising.