- Chinese investors have committed more than US$1.4 billion to Zimbabwe’s lithium industry, creating heavy exposure to one investment ecosystem
- Zimbabwe exported 1.128 million tonnes of spodumene in 2025, with most of the material going to China despite weaker lithium prices
- The country needs to expand domestic processing while diversifying investors, offtake markets and technology partnerships to reduce concentration risk
Harare- Zimbabwe’s lithium industry has expanded rapidly on the back of Chinese capital, but the structure of that growth has left the country heavily exposed to one commercial ecosystem at precisely the point when Government is trying to change how the mineral is produced, processed and sold.
The concentration became impossible to ignore in March after the Chinese Embassy in Zimbabwe advised Chinese companies and nationals to assess the country's business environment, industrial policies and laws carefully before making investments. The notice followed Zimbabwe's February 25 suspension of exports of raw minerals and lithium concentrates, which Government said was intended to address export malpractices and leakages while strengthening domestic beneficiation.
The warning matters because China occupies several positions in Zimbabwe's lithium value chain at the same time. Chinese companies have supplied more than US$1.4 billion of identified investment to Zimbabwe's lithium industry since 2021, while most of the country's spodumene concentrate is exported to China for further processing. Chinese companies including Zhejiang Huayou Cobalt, Sinomine Resource Group, Chengxin Lithium Group, Yahua Group and Canmax Technologies have been central to the development of the country's major lithium projects.
Zimbabwe therefore faces a concentration risk that extends beyond the identity of the buyer. The country relies heavily on Chinese capital to develop mines, Chinese-linked companies to process a growing proportion of the material and Chinese demand to absorb much of the resulting output. A change in Chinese investment appetite, processing margins or demand can consequently reach Zimbabwe through several channels at once.
In an interview with Zvikomborero Sibanda, a renowned independent economist, he said,: “The experience of the DRC shows why concentration deserves attention before a market shock occurs. The DRC sends about 97% of its cobalt exports, mostly unprocessed, to China, while China dominates global cobalt refining. That structure has created a commercially important relationship, but it also leaves the Congolese cobalt industry exposed to developments in one major market and processing system.
“Zimbabwe should avoid building a lithium industry with the same degree of concentration. The country has an opportunity now, while the industry is still developing, to establish several markets and investment relationships rather than having to diversify after a disruption has already occurred.”
The country's own export figures demonstrate why that matters. Zimbabwe exported 1.128 million tonnes of spodumene concentrate in 2025, an 11% increase from 1.014 million tonnes in 2024. Export earnings, however, fell marginally from US$514.5 million to US$513.8 million because weaker lithium prices absorbed the increase in volume.
On the reported figures, the average export value fell from roughly US$507 a tonne in 2024 to about US$455 a tonne in 2025. Zimbabwe therefore shipped substantially more material without generating additional export revenue. That experience provides a direct measure of the country's exposure to the concentrate market: production can increase while the foreign currency generated from that production remains almost unchanged.
The problem becomes more pronounced when the destination of those tonnes is considered. Most of Zimbabwe's spodumene exports go to China, and the 2025 volume represented roughly 15% of China's lithium concentrate imports. Zimbabwe has consequently become an important supplier to the Chinese market while remaining a relatively small participant in the higher-value stages of the battery-material chain.
That position gave Zimbabwe a degree of leverage when Government suspended concentrate exports in February. Chinese lithium prices rose sharply immediately after the announcement, with the most-traded lithium carbonate contract on the Guangzhou Futures Exchange rising 6.07% during the session and briefly gaining more than 9%. The market reaction demonstrated that Zimbabwean supply had become material to Chinese processors.
The episode also exposed the limits of that leverage. Zimbabwe can affect the availability of concentrate to Chinese processors because it controls the resource and the export regime. Chinese companies, however, remain deeply embedded in the financing, processing and downstream markets surrounding that resource. The country therefore possesses an important mineral asset without yet having comparable influence across the entire value chain.
This is the economic case behind the Government's push for beneficiation. Zimbabwe prohibited exports of unprocessed lithium ore in 2022 and had planned to tighten restrictions on concentrate exports from 2027. The February 2026 suspension brought the restriction forward with immediate effect and applied to raw minerals and lithium concentrates, including consignments already in transit. Government said the measure was intended to strengthen accountability, address leakages and promote in-country value addition.
The policy addresses a genuine weakness in the existing model. Concentrate contains substantial mineral value, but the processing stages that follow concentration capture additional margins and create opportunities for chemical production, engineering services, technical employment and supporting industries. Zimbabwe's lithium strategy therefore has implications beyond mining revenue; it concerns whether the country's mineral resources can support a wider industrial base.
The difficulty is that beneficiation requires much more capital and infrastructure than mining alone. A concentrator requires substantial investment in equipment and power. Chemical conversion requires further capital, reliable electricity and water, specialised technical expertise and access to markets. The processing plant also has to remain commercially viable through lithium price cycles. An export restriction can create the incentive to build such capacity, but regulation cannot substitute for the financing, infrastructure and operating capability needed to make the facilities work.
Zimbabwe has already begun building that capacity. Huayou developed a US$400 million lithium processing facility at Arcadia, designed to produce lithium sulphate from concentrate. Sinomine has also been developing processing capacity around Bikita. These projects represent an important shift in the country's position within the lithium chain because material can undergo additional processing before entering the export market. ([Reuters][3])
Yet the ownership of that processing capacity matters.
If Zimbabwe moves from exporting concentrate to processing concentrate locally while the same foreign investment group controls the mine, processing technology and downstream market, the country will retain more economic activity domestically without fully resolving its external concentration. The policy would still deliver local employment, electricity demand, construction activity and tax revenue, but the commercial dependence would remain significant.
This is why the next stage of Zimbabwe's lithium policy needs to focus on diversification alongside beneficiation. Chinese investment has played a major role in creating the industry Zimbabwe has today. Zhejiang Huayou's investment in Arcadia and Sinomine's development of Bikita demonstrate the willingness of Chinese companies to commit large amounts of capital to Zimbabwean lithium. Chengxin Lithium, Yahua and Canmax have also participated in the sector's expansion.
The country would gain more from that investment if it could use the existing platform to attract additional sources of capital, technology and offtake. That opportunity exists because lithium has acquired strategic importance well beyond China. Battery manufacturers, electric-vehicle producers and energy-storage companies across Europe, Japan, South Korea and the United States are seeking more secure supplies of critical minerals. Governments in those markets are also encouraging diversification of supply chains that have become concentrated in China.
Zimbabwe has a resource that fits that strategic requirement. What it needs is an investment environment capable of converting the resource into competing commercial relationships.
The first requirement is policy predictability. A mine and processing plant are long-term investments. Companies commit capital based on assumptions about taxation, export arrangements, foreign-exchange rules, ownership structures, electricity costs and regulatory requirements over many years. When those assumptions change abruptly, the financial model supporting the investment also changes.
The Chinese Embassy's March 19 advisory explicitly drew attention to that issue. It told Chinese investors to conduct comprehensive assessments of Zimbabwe's business environment, industrial policies and relevant laws and to consider investment and operational risks arising from government policy changes.
The statement does not establish that Chinese companies are withdrawing from Zimbabwe. It does establish that policy risk has become a consideration for the investor group that has provided a substantial portion of the industry's capital.
That creates an important test for Zimbabwe's beneficiation programme. Government needs to maintain the policy objective while giving investors enough certainty to finance the infrastructure required to achieve it.
The February suspension also demonstrated the importance of sequencing. A producer can be required to process material locally, but the processing plant has to exist before the requirement can be met at scale. The power system has to support it, transport infrastructure has to move inputs and products, and financing has to be available before construction can begin.
A beneficiation policy that runs ahead of those requirements can constrain production. A policy that is too weak can allow the country to remain stuck at the concentrate stage. The economic outcome depends on whether regulation and industrial investment move together.
Tendai Madondo, Head of Corporate Affairs at Kuvimba Mining House, has also previously emphasised the importance of the wider mining value chain when discussing the sector's contribution to Zimbabwe's economy.
“Gold is a significant part of the mining industry in Zimbabwe and a significant contributor to our GDP as well as foreign exports... as a leading gold-producing company, we’ve got a role to play in bringing the diverse voices around gold production and the entire value chain.”
The same principle is relevant to lithium. The country needs to know how much of the investment associated with the resource is translating into domestic businesses, skills, infrastructure and higher-value exports.
There is a further reason to diversify the lithium market, commodity prices remain outside Zimbabwe's control.
The lithium market experienced a severe downturn after the 2022 price boom as new supply increased and the market moved into oversupply. Spodumene prices fell to around US$610 a tonne in June 2025. Prices subsequently recovered above US$2,000 a tonne in early 2026 as demand expectations improved, particularly around China's expanding energy-storage market.
Those movements demonstrate the difficulty of building national export earnings around one mineral whose price is determined in international markets. Zimbabwe cannot control the global lithium price, but it can influence how much value it retains before the product reaches the international market and how many potential buyers compete for its output.
That is where beneficiation and market diversification reinforce each other. Processing can increase the value of the material leaving Zimbabwe, while additional markets can improve the country's commercial options. Together, they can reduce the consequences of a downturn in any single market or processing chain.
The alternative leaves Zimbabwe vulnerable to a familiar resource-economy problem. Production can expand rapidly, export volumes can rise and foreign investors can commit substantial capital, while the country remains exposed to price movements and commercial decisions made outside its borders.
The 2025 lithium figures provide the clearest evidence. Zimbabwe exported 11% more spodumene but earned slightly less money. The country had increased the physical scale of the industry without increasing the foreign currency generated from that output.
The response should therefore be broader than simply banning concentrate exports. Zimbabwe needs to build a market structure around lithium that gives producers more than one route to market, gives Government more than one source of investment capital and gives the domestic economy more opportunities to participate in the value chain.
China will remain central to that structure. Its battery industry is enormous, its companies have already invested heavily in Zimbabwe and its processing expertise is difficult to replicate quickly. The objective should therefore be to deepen Zimbabwe's options around Chinese participation rather than attempt to remove it.
That means pursuing alternative offtake agreements, encouraging non-Chinese investment and technology partnerships, and ensuring that domestic companies have a meaningful role in the supplier economy.
The country also needs to measure beneficiation through outcomes rather than announcements. The relevant measures should include the value of processed lithium exports, foreign-currency earnings per tonne, domestic procurement, skilled employment, technology transfer, electricity consumption linked to processing and the number of Zimbabwean businesses supplying lithium operations.
Those figures would reveal whether the policy is changing the structure of the economy.
The Chinese Embassy's warning makes the timing particularly important. Zimbabwe is asking investors to put more capital into the country at the same moment that one of its largest investor groups is being advised to scrutinise changes in policy and regulation.
The appropriate response lies in making the beneficiation programme more bankable, more predictable and more diversified.
Zimbabwe should continue using its mineral resource to attract Chinese capital, while actively building relationships with alternative investors and buyers. It should use existing Chinese processing investments to develop domestic skills and suppliers, while requiring new projects to deepen those capabilities. It should align export restrictions with actual processing capacity and infrastructure so that policy does not create an avoidable production bottleneck.
Most importantly, the country should judge the lithium strategy by the amount of economic value retained in Zimbabwe rather than the number of tonnes extracted.
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