As the second largest continent, Africa is home to
30% of the world's mineral reserves. It holds 40% of the world's gold and at
least 90% of its chromium and platinum. It also has the largest reserves of
cobalt, platinum, uranium, and diamonds. With the global demand for batteries
rising and the search for new sources of energy, the world is reliant on minerals from
African countries. But, many African leaders are looking to reclaim
control of the continent's resources. We need to process our lithium and get value. Lithium is a critical component found in electric
vehicle batteries and reserves have been discovered throughout the continent, with
Zimbabwe, Namibia, Ghana, Democratic Republic of the Congo and Mali all having notable
supplies. Most automakers have announced a transition to
electric, meaning the demand for batteries and the minerals in them is going to skyrocket. In 2021, the world mined 540,000 metric tons of
lithium . By 2025, the demand is expected to triple to 1.5
million metric tons, and by 2030, 3 million metric tons. Zimbabwe has been mining lithium for 60 years and
the government estimates that its Chinese owned Bikita mine, located 300km south of the capital
Harare, has about 11 million metric tons of lithium resources
alone. Mining in Zimbabwe is very politicized. It's very securitized and sometimes it's
militarized. In Zimbabwe, there are more than 80 state-owned
Chinese enterprises, which have amassed a total of $10.4 billion in investments and
contracts in the country from 2005 to 2020. Meanwhile, the U.S. has fallen behind and relations with the nation,
have been shaky. I think they already taken Africa for granted for
so long and I think now is the time to say maybe it's time to wake up. In the future, African countries like Zimbabwe
will play an important role in the mining of battery mineral resources. In 2020, Zimbabwe was a sixth largest producer of
lithium, and the country is expected to become one of the world's largest lithium
exporters. CNBC explores Zimbabwe's mining sector to find
out why China has a stronghold on the country and why it matters to the U.S. Whoever comes to invest in the country must be
told that, number one, you have come to Zimbabwe. Respect the Zimbabwean people. The world is changing and we need to get there. With or without us, Africa will move forward. Africa has other options. Zimbabwe is rising step by step, brick by brick and stone upon stone. No one, no one can stop that movement. Zimbabwe is home to over 60 different minerals,
including all five of the critical minerals needed to build electric vehicle batteries: lithium,
cobalt, manganese, nickel and graphite. Minerals play an important role in the
economic growth of Zimbabwe, accounting for 60% of the country's total exports, with the
mining sector contributing to 11% of the national GDP. In 2023, it's expected to grow by 6% and is valued
at 12 billion U.S. dollars. Mining has played a critical role in terms of
sustaining growth in the economy and we've seen a lot of investments within the mining sector over
the past few years. For us to realize the full potential
from the mining sector, it means we have to move up the value chain. Zimbabwe primarily mines gold, platinum and
diamonds, but lithium prices have skyrocketed. The price in May of 2022 was seven
times higher than the price at the start of 2021. Zimbabwe is looking to capitalize off this
increase and the country could potentially meet 20% of the world's demand for lithium once it
fully exploits its known resources. Lithium has been discovered in many parts of the
country, close to the surface. The villagers have been mining that lithium and
selling to merchants, and that helps in alleviating rural
poverty. Chinese companies Huayou Cobalt and Sinomine
Resource Group, owned both the country's most important and resource rich lithium mines. When we invest in the Chinese and allow them to
come and do what Zimbabweans are capable of doing, we are building China, not Zimbabwe. Zimbabweans are saying leave room for the
Zimbabwean people where the Zimbabweans are able to mine and invest in the local economy. CNBC reached out to the Chinese embassy in
Zimbabwe, which declined to comment on the statement. The strategy of most of the new investors in the
lithium mining industry is to go towards mining solid
battery-grade lithium. I don't think the Chinese compete with
artisanal and small-scale miners. The Chinese have served as a middleman. Artisanal miners were doing the mining and then
they would sell to the Chinese mining companies. So, there was some kind of a relationship, a
working relationship. Artisanal mining or small scale mining plays a
critical role in the livelihood of over 1 million Zimbabweans. It's a largely informal method of
mining, where individuals use basic tools to extract minerals. It's estimated that the government has lost
nearly $2 billion in minerals smuggled across the border through artisanal mining leakages. We cannot, as a country continue to be exporting
primary products, including concentrates and ores. In December 2022, the country passed a Base
Mineral Export Control Act, which banned the export of raw lithium. However, companies that are developing mines and
processing plants in Zimbabwe are exempt from this ban. This includes Chinese firms Huayou Cobalt,
Sinomine Resource Group, and Chengxin Lithium Group, which have invested $678
million into lithium projects. Any government in the world was bound to react
when your resources are just flying in all directions. However, the lithium concentrate is still being
exported lawfully out of the country. So I think governments simply wanted to control
the lithium that was being extracted by artisanal
miners, which was not being accounted for, and it was being
smuggled out of the country. Artisanal miners were the worst affected by the
ban because they had already accumulated loads of raw lithium that
they were preparing to sell and they couldn't sell their lithium. They suffered more than any other person. With the new act passed. Zimbabwe is looking to capitalize off this price
surge, signaling to the world that it's open for business, but only if it benefits the country. There are two narratives: the political narrative
that mining is the savior of the economy, and then the
grassroots narrative, which says mining is undermining our
livelihoods. And we sit in between. We want to see mining contribute to the economy,
but not at the expense of the Zimbabwean people. And we say we are friend to all and enemy to none. In 2009, China overtook the U.S. as Africa's largest trading partner. Growing from $121 million of traded goods in 1950
to $10.5 billion in 2000 and now $254 billion in 2021 . Compared to the U.S., which sat at $64 billion
2021. China now accounts for over 70% of global EV
battery production capacity and with over 20 years of consistent commitment to
African nations, it has placed itself in the right position to access the resources needed to
continue this trend, leaving the U.S. to play catch up. In December of 2022, U.S. President Joe Biden welcomed 49 African leaders to
Washington, D.C. for the country's second U.S.-African Leaders
Summit and its first since the Obama administration. The United States is all in on Africa's future. This summit was a critical step needed to
re-establish U.S.-African relations, which were rocky in the previous administration. It took eight years to hold this summit. This came as a reset in relationship between the
United States and African countries. It also was an important moment for the U.S. to signal to Africans that they take Africa
seriously. Zimbabwe will use the meeting to reengage the
United States of America. We hope the U.S.A. will be forthcoming. However, noticeably missing from the summit was
Zimbabwe's President Emmerson Mnangagwa, who was not invited and has been under U.S. travel sanctions brought on by allegations of
corruption and human rights abuses since 2002. In his place, Foreign Affairs Minister
Frederick Shava attended. That itself, the fact that he came is also still a
signal that the U.S . is interested in keeping the door open with
Zimbabwe. While the U.S. pledged its commitment to Africa,
the reality is tensions have been building for a long time. The U.S. has been under pressure from the African
Union and the Southern African Development Community to lift sanctions against Zimbabwe. These sanctions were enacted after then Zimbabwe
President Robert Mugabe launched a controversial program in 2000 that redistributed
land from Zimbabwe's white minority population to its indigenous black population. The U.S. came to the summit with a trust deficit. America has not been consistent in the way that
it engages with Africa. The problem is America tends to go through
European former colonial powers to engage Africa. That is problematic because these countries are
sovereign, independent countries. Following the sanctions, many Western governments
pulled aid and companies like Anglo American, which owns Zim Alloys, one of the country's
largest producers of chrome, sold its stake, leaving room for outside investors. Plus, the country still faces hurdles when it
comes to doing business. Zimbabwe currently has the world's highest
inflation rate, peaking at 283% in 2022 and lending rates can be as high as 45%. Western investors have been a bit more skeptical
when it comes to investing in an environment like Zimbabwe, where there are a
lot of risks. But of course, the Chinese have decided to take
the risks and put in resources. The dominant players in the mining industry prior
to the 2000 have been the Western companies. When sanctions were imposed on
Zimbabwe by the U.S. And EU, Zimbabwe decided to change its foreign
policy and come up with what it called the Look East policy. Western companies were pulling out. Russian and Chinese companies found a way to get
in, especially in the extraction of strategic minerals. The Chinese have a long standing history with
Zimbabwe and were one of the first countries to recognize Zimbabwe diplomatically when it gained
independence in 1980. The Chinese have played for keeps. They showed up in Africa in the 50s during the
independence movement and stuck with those countries, regardless of where the country
stands on the political spectrum. The United States, our relationship is not always
permanent, and the Chinese are just consistent in that way. If you leave and you try come back ten
years later where that void that you left will be filled by somebody else. So it's, it's important that we be consistent. And many of Zimbabwe's mines are Chinese owned,
including the Bikita mine, which is the largest lithium mine in the country, and the Arcadia
mine, which is considered to be one of the world's biggest hard rock lithium resources. Zimbabweans are capable of mining lithium that is close to the surface. They can do that. But the Chinese have been competing with the
Zimbabweans, even in areas where Zimbabwe's can do it. The same happened with diamond mining. Zimbabweans discovered the diamonds, they started
mining. The government sent in the military and they
brought in the Chinese. So there is this feeling among Zimbabweans, that
the government is preferring the Chinese over its own citizens. Chinese investments are pouring into Zimbabwe. In 2022 Chinese mining companies Tsingshan, China
Nonferrous, and Huayou Cobalt invested nearly $1.5 billion into
Zimbabwe. In the same year, Sinomine Resource Group
announced its plan to expand its current production at the Bikita Minerals mine by
investing $200 million into building a new lithium plant. Some of the Chinese companies that are mining in
Zimbabwe. They are buying companies that already exist that
were owned by, say, Australian companies or American companies, and they are
taking over from these old mining companies. While the government is signing deals with Chinese
investors. Zimbabweans aren't naive to the issues that come
with accepting Chinese money. The negotiations of the contracts are done in
secret. Often the national interest is lost in that
secret negotiation. The first thing we need to do is to
be transparent. We don't know the kind of concessions that African
countries are actually giving out to the Chinese. I think there's been a lot of opacity around
Chinese investments on the African continent. It's clear that the resources belong to Zimbabwe,
not the West nor the East. But how can Zimbabwe exploit its full potential? Maguwu proposes an OPEC-like cartel where
mineral-rich countries band together to regulate the price and extraction of minerals
such as lithium. Zimbabwe produces minerals. We need to control the prices of our minerals. We need to control the marketing of our minerals. We also need to engage other countries, even
forming cartels. We need to identify which other countries produce
lithium in the world. Let's form a cartel so that we can control the
global prices of lithium. The idea itself is not far fetched. It all depends on how it's structured and who
comes into that circle. If the DRC, Zambia, Chile, Indonesia, the
United States, Peru, and Canada were to form a cartel,
it gives them power, right? The power of start talking in one voice. With this developed nations that have clout on
the international stage. If, however it presented as us versus them type
of thing, then it can create a lot of animosity, so to speak, between the
Great North, and the rich, and the poor, and so on. One of Zimbabwe's biggest challenges to reaching
its full potential seemed to be its politics and the narratives that surround it. The narrative on Africa is still a narrative that
dates from the 15th century. So that lens then through which you look at
Africa, is murky. You don't see value. You don't see return for your money. You see all the risks, but not the upside that
needs to be changed. So since colonial times, mining has always played
a significant role in Zimbabwe's economy. Zimbabwe has not been able to leverage
the kind of mineral resources that it has. I know in terms of when people talk about mineral
riches in Africa, they talk about South Africa, Ghana and DRC, but Zimbabwe has loads of
minerals. There is massive potential for the country to
really generate hundreds of billions from its remaining mineral
endowment. The elephant in the living room is corruption , nepotism, politicization, securitization, and militarization of our natural
resources. But I think if the government appoints the right
people into the right positions and creates the
conducive environment for professionalism to thrive in the
sector, I'm very certain that Zimbabwe has the capacity
to maximize the potential from its minerals.
Wow, they should immediately require a refinery to be built there. China might do it but the political risk in Zimbabwe is just too high