Chinese companies were awarded licenses in the third quarter of 2023 to develop Zimbabwe’s lithium, mining and energy sectors which will result in up to US$2.79 billion flowing into the African nation.
A total of 121 investors from China will be contributing the funding, according to a recent report from the Zimbabwe Investment & Development Agency (ZIDA). The country accounted for the majority of investment licenses issued by Zimbabwe during the quarter.
“Given the size of lithium deposits and the rush by investors, it became important for the agency to explore the opportunities that this rich deposit presents,” said the ZIDA in its Q3 report.
For lithium exports alone, Zimbabwe earned US$209 million in the first nine months of this year, according to the country’s Ministry of Mines and Mining Development. That dollar figure is nearly three times higher than earnings from the first three quarters of 2022.
“The revenue generated from the export of lithium grew from US$1.8 million in 2018 to US$70 million in 2022. By September 2023, a total of US$209 million had been realized from lithium exports,” said Zimbabwe’s Minister of Mines Zhemu Soda at a mining conference in the city of Bulawayo.
In the past two years, Chinese companies such as Zhejiang Huayou Cobalt (SHA: 603799), Canmax Technologies Co Ltd (SHE: 30090), Sinomine Resource Group (SHE: 002738) and Chengxin Lithium Group (SHE: 002240) have invested over US$1 billion in the acquisition and development of lithium properties and assets in the country.
Zheijang’s company Prospect Lithium Zimbabwe opened a US$300 million lithium processing plant in the country this July.
Soda says demand for batteries will propel Zimbabwe’s economy forward
“The demand for materials used to manufacture lithium-ion batteries has increased dramatically. Due to this demand, new investors, both local and foreign, have entered the sector to mine, process, and export lithium and battery minerals from Zimbabwe,” said Soda.
“Lithium and battery minerals have the potential of powering Zimbabwe’s future,” he added.
Zimbabwe banned exports of raw lithium at the end of last year, a move aimed at getting more value from the mineral while stopping artisanal miners from transporting it over the border.
“No lithium bearing ores, or unbeneficiated lithium whatsoever, shall be exported from Zimbabwe to another country,” said the previous Mines Minister Winston Chitando in December.
It is worth noting that Canada’s Fraser Institute ranked Zimbabwe as the world’s worst mining jurisdiction to invest in last year. The think tank said that Africa was generally a bad investment choice, with eight out of 10 of the worst countries residing in the continent.