In 2022, Zimbabwe, the globe’s sixth-biggest producer of lithium, banned the export of raw lithium. Now it has followed this with a ban on exports of all raw minerals from the country, and Chinese miners are flocking in to build processing plants.
The export ban, which covers all base mineral ores, is just the most recent case of resource nationalism, which we have been increasingly seeing in the world and which comes with both drawbacks and benefits.
However, mining companies already building or owning processing plants will not be subject to this ban, but it means they will have to process raw minerals within the country.
Why has Zimbabwe banned raw mineral exports?
Zimbabwe’s government has made the ban in an effort to expand the local resource sector and keep a part of the supply chain in the country so it profits more from the mining of its ores and in order to stimulate local mineral production.
As for lithium, the aim of banning its export is to grow Zimbabwe’s processed lithium resources in order to one day develop lithium batteries locally.
In addition to these reasons, the ban was also imposed partly in response to the huge number of artisanal miners that have been illegally mining and producing lithium, and smuggling it across the borders to UAE and South Africa. This harms the country’s earnings from minerals – Zimbabwe has purportedly lost a whopping $1.8 billion to illegal exports.
The mineral export ban, therefore, makes it more difficult for these illegal exports to occur and prevent huge losses in mining earnings for the country.
What’s happening in Zimbabwe following the export ban
Two Chinese miners have already made moves to start mining lithium within Zimbabwe. One, Zhejiang Huayou Cobalt, will be investing $300 m into the development of a lithium project, while another, Tsinghan, has made a deal with Zimbabwe to start a lithium mining project in the country.
However, it is not yet known whether the export ban will affect planned projects that don’t have their own processing plants yet (both mining companies have plans to build processing plants for their mining projects).
The global effects of the ban
Zimbabwe is one of the largest producers and (until now) exporters of lithium and nickel ore globally. The country has 220,000 tonnes of lithium reserves, the biggest on the African continent.
Last year it was responsible for producing a little over 1% of the world’s lithium. This is a small amount, yet it still made Zimbabwe the sixth-biggest global lithium producer.
This means the rest of the world will be losing out on exports from a big producer and could struggle to meet rising demands for it in the coming years.
What’s more, lithium, as well as nickel, are currently some of the globe’s key minerals, along with manganese, graphite, cobalt, and copper.
This is because they are crucial elements of batteries for things such as EVs, and so the demand for them will soar as the green transition sees more need for these batteries.
Demand for lithium, for example, is forecast to be 40 times greater by the year 2040. This is according to an executive report from the IEA (International Energy Agency).
However, the ban will encourage local production within Zimbabwe, likely benefiting the country from mineral profits.
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