THE recent ban on raw lithium exports by the Government, amid rampant smuggling of the mineral out of Zimbabwe, will drive beneficiation and allow the country to draw maximum benefits from the strategic “mineral of the future”, a senior Government official has said.
Permanent Secretary in the Ministry of Mines and Mining Development, Mr Pfungwa Kunaka, told The Sunday Mail Business that the ban will promote value addition to the globally sought-after mineral and increase benefits from its export revenue.
Mr Kunaka said before the Government outlawed the shipment of raw lithium, illegal mining had become so widespread that he equated what was happening in the sector to “looting”, while smuggling of the mineral out of Zimbabwe had reached alarming levels.
He reckoned the Government had since received global commendation over the decision to ban raw lithium exports, given the prejudice this had on the growth and development of Zimbabwe’s mineral-dependent economy.
Mineral-rich Zimbabwe is already the world’s fifth- largest producer of lithium despite having a single producing mine (Bikita Minerals). It could, however, soon climb higher on the rankings of major producing countries given the many greenfield projects at various stages of development.
It is expected lithium will, from 2023, contribute about US$500 million to total mineral shipments from Zimbabwe, projected to reach US$12 billion this year.
In a similar move, Indonesia recently announced a ban on exports of bauxite, as part of a strategy to develop a domestic mineral refining and processing industry. The ban on exports of bauxite, the world’s primary source of aluminium, will take effect in June 2023.
“Lithium is a strategic mineral and in terms of the future, it is one of the minerals we call ‘minerals of the future’ in terms of their value and in terms of the value chain. The concern which was there when you export (raw lithium) was that you do not get the maximum value,” Mr Kunaka said.
He pointed out that Zimbabwe had already seen marked growth in the value of mineral exports from less than US$3 billion in 2018, when it launched the roadmap to grow the shipments, to US$12 billion by 2023, to well over US$6 billion presently.
“. . . You gain better when you are value adding. And starting value adding is preparing to exploit the full value chain of lithium, which ends up in issues of products like solar batteries for electric cars et cetera, which is the direction the world is going.
In October 2022, prices for battery-grade lithium carbonate hit an all-time high of US$74,475 per tonne, eclipsing the record set just a month prior.
Lithium pricing trends are deeply rooted in the transportation segment’s ongoing shift towards electrification in order to address climate change issues caused by emissions from internal combustion engines.
In recent years, accommodative government policy, declining costs, consumer preference, and technological improvement have supported the rapidly increasing adoption of electric vehicles (EVs) across the world.
Lithium supply upgrades have not kept pace with this surge in demand. As a result, it is expected the lithium market balance will tilt towards a supply deficit for several years, presenting opportunities for the mining companies and countries that supply the mineral.
Zimbabwe’s decision to ban raw lithium exports dovetails with the African Mining Vision (AMV), which noted that despite Africa being richly endowed with a variety of mineral resources, with potential for economic growth and development, the performance so far has not been consistent with expectations.
One key observation was that effective management of mineral resources is critical to transforming the sector in a sustainable manner.
The overall goal of the African Mining Vision is to create “a transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development”.
“The concern was the manner in which the discoveries (of the mineral) were coming; there was a lot of activity, some of which was illegal. There was also what we would call looting and smuggling, which exposes the Government to losses in terms of revenue.”
Mining accounts for well over 75 percent of Zimbabwe’s export earnings, about 12 percent of gross domestic product, consumes over 60 percent of industrial products and provides employment for tens of thousands across the country.
“Therefore, it was compromising the growth of our mining sector and even the economy. So, the Government realised that and decided that we need to ensure the nation benefits from this critical mineral,” Mr Kunaka said.
It is expected the value addition will allow the country to benefit from job creation through value addition processes, and increased export earnings, adding “this is the logic” of the decision to ban the export of raw lithium. Mr Kunaka stressed that prior to the new law, there was no legislation to deter offenders or criminalise the export of raw lithium in Zimbabwe.
Lithium, he said, will play a key role towards the realisation of the US$12 billion mining industry economy in Zimbabwe by 2023, an important milestone towards the achievement of Vision 2030, by which time Zimbabwe should be an empowered upper middle-income society.
Mr Kunaka said, at just over US$6 billion annual mineral exports currently, the shipments were still significantly way off the desired 2023 target but was confident the US$12 billion target would be met given the several new projects recently commissioned.
Global demand for lithium
Lithium prices have surged 123 percent year-to-date and are up as much as 10 times versus historical levels, according to the Benchmark Minerals Intelligence lithium price index.
As momentum accelerated towards EVs in recent years, so did aggregate demand for lithium. On average, the lithium-ion battery packs found in EVs contain about 9 kilogrammes of lithium, thousands of times more than most consumer electronics.
Global EV sales doubled from 3,3 million units to 6,6 million units between 2020 and 2021 and were expected to increase by another 52 percent in 2022.
Annual lithium demand is projected to reach roughly 1,5 million tonnes of lithium carbonate equivalent by 2025 and over 3 million tonnes by 2030. This 2025 forecast calls for triple the demand seen in 2021.
EVs could account for about 84 percent of total lithium demand in 2030, up from about 55 percent in 2021.
Lithium mines and projects in Zimbabwe
Bikita Minerals is Zimbabwe’s biggest lithium producer and is the home to the world’s largest-known deposit of the metal at around 11 million tonnes.
The mine has been an active mining site for around 100 years. China Sinomine Resource Group, which recently acquired Bikita Minerals, will invest US$200 million to build a plant and expand its existing mining operations at the lithium producer. Zimbabwe also has several upcoming projects, with the Arcadia lithium mine expected to start delivering lithium-containing minerals spodumene and petalite this year.
It is anticipated that Arcadia will be producing an average of 212,000 tonnes of 6 percent spodumene concentrate, 216 000t of petalite concentrate, and 85 275 kg of tantalum per annum from Arcadia.
The project is estimated to have a mine life of 12 years.
Huayou, one of the world’s major producers of cobalt, last year completed a US$422-million purchase of the hard-rock lithium mine from Australia-listed Prospect Resources.
Sabi Star Lithium Mine
Shenzhen-listed Chengxin Lithium Group last year also acquired a 51 percent interest stake in Sabi Star Lithium Mine in eastern Zimbabwe for US$77 million.
The company, listed on the Shenzhen stock exchange, spent US$76,5 million last September to buy 51 percent of MaxMind, which held claims.
Another project is the Premier African Minerals-owned Zulu Lithium and Tantalum Project near Bulawayo.
There is also the Zulu Lithium and Tantalum Project, possibly the largest undeveloped lithium-bearing pegmatite in Zimbabwe, located 80 kilometres from Bulawayo.
In early August, Premier received US$18,1 million from Suzhou TA&A Ultra Clean Technology, as part of the marketing and prepayment agreement, which the two parties entered into in June this year.
Also promising is the Shamva-based MIRRORPLEX (Pvt) Limited’s lithium project, which is currently in the exploration phase.
The project, which is postured to become Zimbabwe’s biggest hard rock lithium resource, has the potential to grow into a world-class lithium mine. – The Sunday Mail
