The Sunday News
INTRODUCING his 2014 publication “Empire of Cotton: A New History of Global Capitalism”, Sven Beckert, the award-winning Harvard History Professor, wrote: “The movement of capital, people, goods and raw materials around the globe and the connections forged between distant areas of the world are at the very core of the grand transformation of capitalism …”
Mid-December last year (2022), I officiated at the ground-breaking ceremony of the Buhera-based Sabi Star Mine in Manicaland province. Sabi Star is set to mine lithium, and is owned by the Hong Kong-based Max Mind Investments (Pvt) Ltd.
As I officiated at this investment event, several 30-tonne trucks were either on our roads towards border crossing points, or had already bee- lined at various border posts to take our raw lithium ore out of the country. Destinations for this strategic cargo were both within our region and to the wider world.
I was a deeply worried man.
Even more unsettling was the realisation that our country Zimbabwe did not have a law to stop this from happening. This meant that in the coming days and weeks, more raw lithium ore would be carted out of the country with impunity. That would rapidly deplete a strategic, non-renewable mineral, while giving the country modest returns, and at little or no risk to those in a hurry to export the raw ore, thus robbing us and future generations of this finite resource.
Something had to happen urgently!
Globally, lithium is a strategic mineral. It holds key to the global transition to clean energy. This alone, makes the demand for it worldwide. Countries are stampeding to secure sources for this vital resource, in anticipation of the transition to electric vehicles (EVs). Whoever holds this resource is thus the king!
Abundant lithium deposits
Zimbabwe is among a handful of countries lucky enough to have lithium deposits in relative abundance. So far, our country has identified lithium deposits in several provinces, principally in Mashonaland East, Masvingo, Manicaland, Mashonaland Central, Matabeleland North and in Matabeleland South.
More deposits could still be found. What is more, like platinum, lithium ore comes with several other mineral by-products which are just as strategic, at the very least supportive to this global energy transition. These, too, need to be accounted for nationally.
lithium
Let me illustrate the value of this wonder mineral. As I write, German automaker, BMW announced only yesterday it is set to invest US$866m in Mexico towards the production of lithium car batteries to power its new line of electric vehicles (EVs). BMW projects that by 2030, half of all its auto sales globally will be all-electric cars; this date is a mere seven years from now!
In America alone, BMW has invested some US$1,7 billion towards the same end. This is over and above what BMW is doing in mainland Europe. The world has several automakers who, like BMW, are planning for similar transitions and investments.
Globally, rising demand for EVs is projected to cause new highs in the demand for lithium.
This, together with limited sources of lithium ore globally, is projected to create a demand-supply imbalance which inevitably favours the few countries in the world with lithium deposits; Zimbabwe is one of them. In 2022 alone, global output of lithium stood at 650 000 tonnes, a figure slightly above global demand. By 2027, lithium output is projected to reach 1,47 million tonnes, well below global demand which robust global electric vehicle sales will likely push up.
Reaping the rewards
Prices for two key raw materials for making electric vehicle batteries, namely lithium hydroxide and lithium carbonate, stand at a minimum of US$75 000 and US$70 000 per tonne, respectively. These prices are likely to go up, against increased demand for these two raw materials, and set against natural supply constraints. Zimbabwe, with its significant lithium deposits, should reap rewards from this worldwide energy transition. This is why responsible and creative stewardship of the mineral is very important.
Yet the illicit and unregulated exportation of raw lithium ore threatened all this. Artisanal miners, who had rushed to mine and to informally sell this vital mineral to big foreign exporters, were unaware of the fabulous value of the mineral in the global market. Artisanal miners active in Midlands, Mashonaland Central and Mashonaland East provinces were selling lithium ore at ridiculous prices of as low as US$150 per tonne at most! Beyond our borders, the same ore would sell at above US$7 000 per tonne! There were no winners in the country.
Artisanal miners at work (File picture)
If anything, the country and its people were bleeding at a time when there was no law or enforcement mechanism to keep and guard the gates.
Revamped policy
Within days, Government gazetted a law to stop this pillage. Still the smuggling of lithium and other strategic ores did not stop; if anything, the illicit mineral ore flows escalated.
A more comprehensive response was thus needed. As I write, exportation of all raw mineral ores from Zimbabwe, including those of lithium, are now illegal, except with the permission of Government. This new law has to be understood together with another one on mining royalties.
From October last year, all mining companies exploiting designated minerals are required to pay half of their royalties to Government in actual processed minerals; the other half of royalties due to Government continue to be paid in cash. This new policy means our country for the first time is beginning to stockpile strategic minerals, thus building reserves for current use, and for future generations.
We thus started 2023 with a completely revamped minerals policy, a new one ever on our African continent and even beyond.
The world has since taken notice, with several countries in comparable circumstances hailing this bold move. Even mining companies are beginning to support the new policy, which I announced at Sabi Star Mine. I went further. I reminded all mining companies to draw up and share with Government their mineral beneficiation plans.
I also reminded them to declare any other mineral by-products co-extensive with the main mineral for which they are licensed. All beneficiation plans have to be time-framed, and will be enforced to the letter. The benefits of this new beneficiation thrust will soon show when a new energy park takes shape in Mapinga, just outside Harare.
The energy park is itself a precursor of things to come in our economy. I applaud all players in the mining sector and in industry who have readily embraced this new policy.
Leveraging on our mineral wealth
Why have we adopted this new thrust in mining? From colonial days right through to our Independence, Zimbabwe was exporting raw mineral ores to other economies of the world, principally those in the Western Hemisphere. The justification for this in colonial times lay in the exploitative policy which divided the world into colonies and metropolises. The latter were even called “Mother Countries”!
Sir Godfrey Huggins, the then leader of the colonial Federation combining the then two Rhodesias and Nyasaland, figuratively called this a relationship of a horse and its rider. We, the satellite ex-colonies, were the horse; the white, so-called Mother Countries were the riders.
Yet it is quite hard to find anything maternal in such a one-sided relationship where owners of depletable resources are reduced to mere horses to be ridden by those in whose soil not the smallest particle of gold is found! But then, the times were colonial, in which case the law of conquest governed relations between the metropolitan centre and the colonial periphery.
What of now, a good four-plus decades into our Independence? What justifies the perpetuation of this rider-horse relationship, in the sphere of mining at the very least? Hardly anything defensible! Zimbabwe has no other “mother” except itself. It must produce the milk that its children suckles, and which nourishes them.
Similarly, Zimbabwe is not a horse to be ridden; rather, it is a sovereign country looking to engage and re-engage with other sovereign nations of the world, all on the principle of equality and mutual gain. Above all, it is a young, ambitious nation anxious and ready to leapfrog, so it industrialises and modernises itself rapidly.
We must use all our finite mineral resources to build our capacity to transform and industrialise our economy. Only that way do we develop and modernise our people and society. We can never do so for as long as we see ourselves as suppliers of raw materials to other countries and continents, for their exclusive processing, so, in turn, they turn us into mere buyers and consumers of expensive goods made out of raw materials they will have secured from us for pittance.
In the end, we lose finite resources; we lose value; we lose jobs and skills, simply because we have agreed to be frozen for endless time as producers and exporters of raw materials, including mineral ores! We have to break that colonially-derived legacy.
A new political economy
The time has now come to break false and artificial enclaves created by the colonial mode of production in our economies. Our mining sector must talk to industry, indeed trigger industrialisation in our country where mining takes place. This cannot happen for as long as raw, unprocessed ores are being sent abroad.
The time, too, has come to use our comparative advantage as sources of finite raw materials to cause global capital to relocate to where the resource exists, namely in our country and on our continent.
That way, even skills we lost to the developed world will return home to complement those we build through our own efforts. A new political economy must begin to emerge, until we get to that critical stage where all processing and all value chains are domesticated in our country.
This is the vision I have; indeed, the thinking behind recent measures we took in respect of mining. All those factors, which Professor Beckert identified as transforming global capitalism in a grand way, must now find expression in our country and on our continent.
A new nationalism
My call to all Zimbabweans, both at home and abroad, is for us to develop a new consciousness which is oriented towards a new socio-economy in which transformational processes are domesticated to become resident in our country.
We can no longer be happy to circumvent national markets we create for our minerals, in favour of foreign ones where we are duped and where value is lost or traded cheaply. We need a new nationalism which contests net national value loss through un-strategic exportation of our non-renewables.
And much more. We need to set new sights on skills development and rapid technology uptake so we become useful players in the emerging value-driven socio-economy.
Focused research and development must become the new calling. It is not enough to ban raw mineral ores; we must begin to apply ourselves towards building industrial processes and structures, which transform those ores into semi-to finished products here at home.
On its part, Government will be ready to support and encourage, both through policy and through facilities, any efforts aimed at advancing a value-chain driven socio-economy.
Above all, Government will now proceed by identifying clusters of minerals which together underpin any one value chain so we rapidly take off.
The question we should be asking ourselves in respect of lithium is, what minerals, what capital, what industrial structures, what skills set and what strategic partnerships do we need to launch a new energy industry for a new global age in which Zimbabwe is a notable player?
That is the National Question and challenge.
Nyika inovakwa nekutongwa nevene vayo!
