CHINESE companies have made investments totalling US$700 million in Zimbabwe’s lithium sector, which are however blighted by negative impacts such as displacement of communities, environmental degradation, pollution, unfair labour practices, safety and health, an environmental watchdog has said.
NATHAN GUMA
The scramble for lithium in Zimbabwe — which boasts Africa’s largest and the world’s fifth-biggest reserves of “white gold” — is escalating, against the backdrop of soaring demand for the lucrative mineral, but local communities continue getting a raw deal and are largely excluded from benefitting.
Lithium is used in the manufacture of energy-storing batteries and has seen growing demand as electric vehicles gain global popularity. In its presentation at the 15th edition of the Alternative Mining Indaba (AMI) 2024, Obert Bore, a legal researcher at the Zimbabwe Environmental Association (Zela) said the country has attracted investments exceeding US$700 million from Chinese investors.
The investors that have ventured into Zimbabwe’s lithium sector include Sinomine Resource Group, Zhejiang Huayou Cobalt, and Chengxin Lithium Group.
“In our attempt to unmask webs of corporate structure, we noted that Zimbabwe’s lithium value chain linkages to the biggest global EV makers like Tesla, Build Your Dream, VW, BMW and electronic makers such as South Korea’s LG Group and Japanese Panasonic Holdings,” said Bore in his presentation.
“These linkages can be gleaned from the private-led offtake agreements between lithium mining companies and buyers. For instance, Arcadia Prospect owned by Zhejiang Huayou Cobalt Ltd signed offtaker agreements with Tesla, BYD and LG Group.”
“Similarly, Sichuan Yahua Lithium Industry Technology Co Ltd (KMC), which has a joint venture project with the Zimbabwean Government through the Zimbabwe Mining Development Corporation, has similar agreements for the supply of the lithium with BMW, VW, Panasonic, GAC Motors. BYD, which surpassed Tesla as a leading EV maker, is a major shareholder in Shenzhen Chengxin Lithium Group Company Limited, which owns the Sabi Star lithium project through its subsidiary Max Minds Private Ltd.”
Bore said while the investments have contributed to revenue generation through taxes, job creation and downstream economies, the human, social and environmental costs have been massive.
There are huge negative impacts such as displacement, environmental degradation, pollution, unfair labour practices, safety, health, loss of livelihoods for indigenous communities and inadequate consultation with mining host communities.
For instance, Max Minds Private Ltd has relocated 40 communities from Buhera, while Premier African Minerals Resources is linked to the displacement of 33 households in Insiza, while unfair labour practices and water pollution at Kamativi and inadequate environmental impact assessment consultation at Gwanda lithium have been noted.
“These negative impacts are exacerbated by weak enforcement mechanisms, lack of capacity by the state agencies to constantly monitor compliance, and weak mechanisms for access to remedies. The current legal and policy [instruments] do not effectively address governance of critical minerals to promote responsible mining, the beneficiation and value addition, the transparency and accountability, community participation through PFIC [passive foreign investment company] provisions, among other gaps,” Bore said.
He said Zimbabwe ought to develop a critical minerals specific strategy drawing inspiration and lessons from Canada’s and Australia’s Critical Minerals Strategies, or the EU’s Critical Raw Materials Act.
“The Africa Green Minerals Strategy is equally central for countries like Zimbabwe to invest in research and development and participate in regional value chains by establishing partnerships with other governments in Africa such as DRC [Democratic Republic of Congo], Zambia, Namibia, and Mozambique,” Bore said.
“To ensure ethical and responsible mining of transitional minerals, it is essential for policymakers to adopt and implement international human rights standards and global frameworks such as the United Nations Guiding Principles on Business and Human Rights, OECD [Organization for Economic Cooperation and Development] Due Diligence Guidance for Responsible Business Conduct, Africa Mining Vision, African policy on Business and Human Rights, EITI [Extractive Industries Transparency Initiative].”
“Actors like Chinese corporations should be held to the highest standards as prescribed by the CCCMC’s Chinese Due Diligence Guidelines for Responsible Mineral Supply [China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters]. The session also shared some recommendations for alignment of national legal and regulatory frameworks with these standards including the Constitution of Zimbabwe.”
While investments into Zimbabwe’s transitional minerals sector is largely dominated by Chinese entities, other investors from Australia, United Kingdom, South Africa, Russia, Mauritius, India, and Cyprus are significant players.
For instance, Premier African Minerals Resources Limited from the United Kingdom is one the investors in the lithium sector, while Marula Mining PLC, also from the UK, has been exploring for copper in Zimbabwe.
