ZIMBABWE should refrain from awarding all of its mining rights to investors from one country, a resource campaign organisation has warned.
The Zimbabwe Environmental Law Association (Zela) said this week the most viable strategy would be to spread lithium licences to investors from other countries.
Zela said at the heart of the lithium rush in Zimbabwe was the multimillion-dollar acquisition of lithium mining and exploration rights by mostly Chinese firms.
“The Chinese have acquired the biggest portfolio of lithium mining projects in Zimbabwe,” Zela noted in its analysis of the sector.
The report is titled “Implications of the Lithium Mining Rush in Zimbabwe, Analysis of the Legal Developments”.
“Domination by one country may lead to undesirable results such as under-valuation of mineral resources, tax avoidance and human rights abuses in the sector,” it added.
“Prospect Resources, an Australian-based exploration and development company, who sold their mining rights to Zhejiang Huayou Cobalt still own Step Aside Lithium Project in Harare. Step Aside lithium project is currently doing exploration,” Zela said.
Lithium is a rare mineral that is currently being mined in only eight countries, with 85% of global supply originating from Australia, Chile and China.
According to the Resources and Energy Quarterly Report released by the Australian Department of Industry, Science and Resources in March, the world lithium output is expected to reach 964 000 tonnes this year and 1,1 million tonnes in 2024 with Australia being the world’s biggest supplier.
Zimbabwe is the world’s sixth largest lithium producer with its output rising steadily in recent years from 1 200 tonnes that was being produced in 2021.
Experts say Zimbabwe has the potential to account for 20% of global lithium output when all known reserves are exploited.
Global demand for lithium has grown significantly over recent years and is expected to increase as it is a key component in electric and other car batteries, an industry that has been booming in the past few years.
These batteries, particularly for electric cars, represent about 80% of lithium use and have caused demand to soar.
“This growing demand has generated a series of legal and policy responses in Zimbabwe such as the ban on export of raw lithium, the ban of base minerals export and the amendment of the Mines and Minerals Act which will recognise lithium as a strategic mineral,” Zela said. – (The Independent)