Zimbabwe Sets March 2024 Deadline for Lithium Beneficiation Plans
Government Pushes for Local Lithium Processing
Zimbabwe's lithium mining companies have been given a deadline of March 31, 2024, to submit their plans for local beneficiation, as the Government aims to leverage the mineral's potential to boost national revenues. The initiative is part of a broader strategy to transform and develop the economy through the beneficiation of critical minerals, including platinum group metals (PGMs), gold, lithium, and diamonds.
PGMs as a Model for Lithium Sector
Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube, in the 2024 National Budget, emphasized the success in PGMs beneficiation, which is expected to be replicated in the lithium industry. He stressed that lithium processes not resulting in the production of lithium carbonate would not qualify as beneficiation and would be subject to export tax.
Licensing and VAT Legislation
The Minister stated that future licenses for lithium mining operations would only be granted upon the approval of a beneficiation plant. The existing Value Added Tax legislation already defines “un-beneficiated lithium” and targets its export for use outside Zimbabwe, especially for battery manufacturing.
Zimbabwe’s Lithium Potential
Zimbabwe, with the largest lithium deposits in Africa, is well-positioned to become a significant player in the global lithium market. It's estimated that the country could meet 20% of the world’s lithium demand if it fully exploits its reserves. Lithium is increasingly important in the transition to zero net emissions.
Current State and Future Plans
Several Chinese companies, following Zimbabwe's ban on raw lithium exports in December 2022, are investing in lithium processing plants. Prospects Resources Zimbabwe, Bikita Minerals, and Zulu Lithium are reported to have constructed plants for ore beneficiation. The Government’s ultimate goal is the domestic manufacturing of lithium batteries for electric vehicles.
Projected Lithium Output and Community Levy
Lithium output is expected to rise to 1.1 million metric tons, with contributions from mines like Zulu Mine. A proposed 1% levy on the gross proceeds from lithium and other minerals will fund community development in mining areas.
Growth and Corporate Social Responsibility
The mining sector is expected to grow by 7.6 percent in 2024, with investments in PGMs, gold, coal, and lithium driving this growth. However, the Minister highlighted the need for enhanced corporate social responsibility in the mining sector, emphasizing the importance of providing basic services to communities impacted by mining activities.
