Zimbabwe's lithium sector achieved historic highs in 2025 with sales volumes of 1.522 million metric tonnes generating US$571.6 million in revenue exceeding targets by 33% in volume and 10% in value

The government extended beneficiation efforts with a planned ban on lithium concentrate exports starting January 2027 , building on the 2022 raw ore export ban

Backed by Chinese investments and reserves of ~480,000 tonnes lithium content, the sector offers growth potential in the EV and battery supply chain

Harare- Zimbabwe's lithium industry (white gold) delivered a stellar performance in 2025, with sales volumes reaching 1.52 million (1,522,893.93) metric tonnes and generating US$571.6 million in revenue, surpassing targets by 33% in volume and 10% in value, solidifying the country's position as Africa's largest lithium producer.

This achievement came amid a surge in Chinese-led investments and a push for local beneficiation, though challenges like depressed global prices and regulatory pressures tempered the sector's momentum.

As the world transitions to electric vehicles (EVs) and renewable energy storage, Zimbabwe's lithium reserves estimated at 480,000 metric tonnes position it as a key player in the global battery supply chain, but strategic reforms are needed to maximize long-term benefits.

Globally, the lithium industry in 2025 grappled with oversupply and price declines, even as demand grew robustly. Worldwide lithium production rose 18% to approximately 240,000 metric tonnes (excluding U.S.), driven by expansions in Argentina, Chile, China, and Zimbabwe, while consumption climbed 29% to 220,000 tonnes, primarily from EVs accounting for 87% of end-use.

Prices for lithium carbonate fell sharply, dropping over 80% since 2023 peaks to spot levels around US$9,400–14,200 per tonne by late 2025, due to surplus inventories and slower-than-expected EV sales convergence.

The global lithium extraction market was valued at US$5.04 billion in 2025, projected to grow at a 10.4% CAGR to US$11.94 billion by 2033, with Asia Pacific dominating 64% of share amid EV battery boom.

Demand exceeded 1 million metric tonnes in 2025-end, rising 4.7–5.5 times by 2040, fuelled by clean energy transitions, though short-term surpluses persist for copper and lithium. Top producers, Australia, Chile, and China control over 80% of supply, highlighting concentration risks as emerging markets like Zimbabwe ramp up.

In Zimbabwe, 2025 saw continued heavy investments, predominantly from Chinese firms, building on a decade of inflows totalling billions. Key deals included Sinomine Resource Group's US$180 million acquisition of Bikita Minerals in 2022 with further expansions in 2025 for lithium sulphate processing, Zhejiang Huayou Cobalt's US$422 million purchase of Arcadia Lithium Project, and Chengxin Lithium's 51% stake in Sabi Star, US$76 million initial investment, scaled up in 2025.

Yahua Group committed US$130 million to Kamativi, while Canmax Technologies/Premier African Minerals advanced the Zulu Project with US$35 million. These investments boosted production capacity, with Zimbabwe accounting for over 10% of global lithium concentrate supply by 2024-end, up tenfold since 2022.

Total sector exports reached US$210 million in 2025, though global price weakness capped revenue gains. State-owned Kuvimba Mining House played a role in oversight, aligning with Vision 2030 to foster downstream industries.

The key players dominate through Chinese ownership. Sinomine (Bikita), Huayou (Arcadia), Chengxin (Sabi Star/Max Mind Investments), Yahua (Kamativi via Bravura), and Premier African (Zulu).

Smaller operations like Prospect Lithium Zimbabwe (Chinese-backed) and global firms like Bravura (with UAE ties) add diversity, but over 90% of projects are Chinese-controlled, raising concerns about dependency.

Bikita and Arcadia are building processing plants for lithium sulphate, signalling a shift from concentrates.

Policies governing the sector emphasize beneficiation to retain value. A 2022 ban on raw lithium ore exports was extended in June 2025 to concentrates by January 2027 (potentially earlier), aiming to force local refining.

Export taxes include 10% on unprocessed lithium ore, 5% on concentrates, and 0% on sulphate, payable in USD to boost forex reserves. A 5% VAT on concentrates unless beneficiated prompted miner requests for a moratorium until late 2026, citing capital-raising delays amid low prices.

Tax incentives for miners ended January 2025 to encourage processing, while a 20% special capital gains tax on mining claim transfers was introduced in 2023. Special Economic Zones (SEZs) were extended to mining in 2019 but reversed in 2023 for better governance.

To optimize government revenues without stifling investment during price fluctuations, Zimbabwe could introduce a tiered royalty system where rates for lithium escalate with market prices and decrease during downturns. In Chile, the variable royalty model ranging from 6.8% to 40% based on lithium prices for major producers like SQM and Albemarle has proven effective, generating over US$5 billion in fiscal income during the 2022-2023 price boom while allowing miners to weather 2025's downturn with lower effective rates.

This system helped Chile expand production by 20% annually without deterring foreign capital, as it ties state take to profitability rather than fixed volumes. Zimbabwe could adapt this by setting royalties at 2-5% during low-price periods and scaling to 8-15% when prices exceed a certain threshold  incorporating environmental compliance bonuses to encourage sustainable mining.

Such flexibility would boost state coffers annually during highs, while providing relief to operators like Sinomine and Huayou, preventing project delays seen in fixed-rate regimes like Australia's 5% ad valorem, which has faced criticism for not adapting to volatility.

Leveraging existing partnerships, Zimbabwe could lobby BYD, the Chinese EV giant that launched models like the Shark 6 and Sealion 6 in the country in early 2026 to establish a local battery manufacturing or assembly plant, offering incentives such as 5-10 year tax holidays, subsidized land in Special Economic Zones (SEZs), and duty-free imports on advanced machinery.

BYD's current operations in Zimbabwe focus on vehicle sales and distribution, creating jobs and contributing to tax revenue, but expanding to battery processing would integrate the lithium supply chain, utilizing local concentrates from projects like Bikita and Arcadia.

Indonesia provides a compelling precedent. Its 2014 raw nickel ore export ban, combined with tax incentives and energy subsidies, compelled companies like Tsingshan and BYD to invest over US$30 billion in downstream facilities, transforming the nation into a global battery hub and boosting GDP growth by 1-2% annually.

Zimbabwe could mirror this by mandating a percentage of local content (e.g., 20-30%) in BYD's operations, while providing R&D grants for lithium hydroxide refinement, potentially creating 5,000-10,000 jobs and adding US$500 million in annual exports by 2030. This would reduce dependency on raw exports and foster technology transfer, addressing criticisms of current Chinese dominance where over 90% of projects lack significant local value addition.

To diversify beyond Chinese investments and lure Western capital, Zimbabwe could court Tesla by easing legislation, such as introducing a 5-year corporate tax holiday for processing facilities and removing duties on sophisticated machinery like refiners and separators. Tesla's CEO Elon Musk has publicly eyed African lithium sources, including Zimbabwe's, and the company's Starlink rollout since 2023 provides a natural entry point for collaboration on connectivity-enabled mining tech.

Argentina's approach offers valuable lessons. By reducing import duties from 12% to 8% in 2023 and offering tax stability agreements, the country attracted Tesla suppliers and saw lithium production jump 87.5% in 2024, with investments exceeding US$4 billion from firms like Livent and Ganfeng.

Zimbabwe could implement similar measures, coupled with streamlined permitting in SEZs and environmental impact bonds to ensure sustainability, potentially securing a Tesla-backed gigafactory that processes 50,000-100,000 tonnes annually. This would not only boost output to 160,000 tonnes LCE by 2030 but also enhance geopolitical balance, mitigating risks from over-reliance on one investor bloc and aligning with global standards like the U.S. Inflation Reduction Act's sourcing requirements.

Ghana's mining policies, particularly in lithium, emphasize community benefits and fiscal transparency, which Zimbabwe could adopt to build public support and attract ethical investors. Ghana's Minerals Development Fund Act (2016) allocates 20% of royalties to local communities, reducing conflicts and fostering social license, as seen in the Atlantic Lithium project where initial 10% royalties were negotiated down but tied to local content mandates (30% Ghanaian stake).

Zimbabwe could enact similar legislation, dedicating 15-20% of lithium royalties to community funds for infrastructure in mining areas like Bikita and Goromonzi, while introducing independent audits to combat corruption perceptions. This mirrors Chile's community engagement requirements in its National Lithium Strategy, which mandates profit-sharing with indigenous groups, helping secure long-term investments amid environmental concerns. For Zimbabwe, such measures could increase investor confidence and boost revenues.

Creative incentives like accelerated depreciation for green tech and R&D tax credits, inspired by Chile's model that spurred SQM's US$2 billion hydroxide expansions, could accelerate Zimbabwe's downstream shift. Bolivia's state-led partnerships with duty exemptions in Potosi drew Chinese investments despite delays, suggesting Zimbabwe blend state equity (like 20% in new projects via Kuvimba) with private incentives.

Full beneficiation could double revenue per tonne, lifting total exports to US$1-2 billion annually by 2028, but requires addressing power outages through solar incentives for mines. By critically adapting these global lessons, Zimbabwe can transform its lithium sector into a cornerstone of economic independence, mitigating price volatility and ensuring equitable growth.

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