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Writes Hillary Munedzi
The government of Zimbabwe through the Ministry of Mines and Mining Development has unveiled opportunities for investors to invest in value addition and beneficiation of minerals through restricting the export of all ores and under-processed minerals.
Through the Base Minerals Export Control (Unbeneficiated Base Mineral Ores) Order, 2023, contained in Statutory Instrument 5 of 2023 and signed by the Minister of Mines and Mining Development, Hon Winston Chitando, the government ensures that no mineral can be mined or quarried that can be exported until it has reached set-down levels of processing.
According to the Mines and Minerals Act, minerals are effectively anything of value that can be mined or quarried, and base minerals are everything except the precious metals of gold, silver, and the platinum group, diamonds and other precious stones, and mineral oils and gases.
The new order defines base minerals as everything else not covered by other laws and includes coal and coke as well as the non-precious metals commonly regarded as base metals, plus anything else that can be mined or quarried and is declared a base mineral.
The objectives of the bans under all Acts of any ore are designed to encourage the maximum possible processing within Zimbabwe, adding value, with this processing value in many cases worth a lot more than the ore being processed. This maximises the value of the export, creates processing jobs in Zimbabwe, and builds up the industrial investment and skills base.
The President of Zimbabwe, HE Emmerson Dambudzo Mnangagwa has on many occasions praised the decision to restrict the export of unprocessed minerals saying that it will encourage the creation of higher-value downstream processing jobs in the domestic market.
Export restrictions of raw materials are also used to meet other objectives; for example, to generate revenue for the government, to control the export of illegally mined products, to enhance environmental protection, or to offset exchange rate impacts caused by exports of several commodities.
According to the Minerals Marketing Corporation of Zimbabwe, the government is open for business to companies that want to establish value addition and beneficiation facilities as this will be of great significance towards the achievement of the government’s 2030 vision where the country expects to achieve an upper middle-income economy.
MMCZ ‘s role in value addition is to encourage producers to value-add their products. The MMCZ is calling for local and foreign companies to consider investing in value addition and beneficiation as it is one of the pillars for the achievement of the President’s 2030 vision.
The Institute of Zimbabwe Foundries (ZIF) past president, Itai Zaba, said the Government’s bold stance was crucial for the metal foundry industry, which was facing challenges in securing inputs at affordable rates.
As such, Mr. Zaba said the ban will promote the beneficiation of all ores, which will promote industrial growth, employment creation, and technology transfer to the country.
He said the ban will not benefit the foundry family alone but downstream suppliers.
“Beneficiation will promote industrial growth via setting up of new plants and this will bring about the much-needed employment and also bring about technology transfer to Zimbabwe.
“Also, the value chain cannot be closed in at the foundry alone, it goes far to various suppliers in services, chemical, gas, fuel, power, construction, banking, and Zimra who will find the opportunity to do business in the foundry and chrome beneficiation sectors.
“So, one should never be blinkered like a horse to only see the foundry industry in this equation, it’s a big net of benefits to the nation,” Zaba said.
ZIF Chief Operating Officer, Mr Dosman Mangisi, hailed the government’s stance on the ban on exports of base metals which are important in the iron and steel manufacturing industry. He said that the ban has come with opportunities for local investors to move around to feed the foundry industry raw materials like ferromanganese which the country has been exporting.
“The foundry opportunities that exist are making or manufacturing of raw materials, currently we don’t have ferromanganese, we were importing it from Zambia yet we have it raw here. The ban will boost business, in terms of creating companies that can produce for example ferromanganese. We can also produce cathodes. The foundry sector is a billion-dollar industry, the ban by the government is a step towards unveiling all the opportunities,” Mangisi said.
A promising young mining consultant, Mr. Nyasha Magadhi, said that the ban on raw minerals exports has created opportunities for local investors as well as foreign investors who can start by establishing mineral processing plants similar to what the government has been doing in the gold industry. He said all over the country, there are many gold processing plants, and the same should follow for minerals like lithium in producing concentrates.
“The government by banning the export of raw minerals has created opportunities for both local and foreign investors in the processing industry. Now we are going to encourage investors to put their money in processing minerals starting with lithium. We want the government to also bring to the lithium sector lithium service centres where miners will be delivering their raw lithium for processing.
“The ban will benefit youth through creating more jobs and downstream activities for communities,” Magadhi said.
The ban has seen a local mineral processing company Ionosphere Investments owned by Nyasha Chido begin the production of lithium concentrates and it will be producing approximately 36 000 thousands of concentrates annually.
Chido revealed plans to almost double Ionosphere’s targeted annual output to about 70 000 tonnes of lithium concentrates and this would place the company among the country’s top four producers.
“We see all the demand is there — significantly unmet demand — for battery-grade lithium in the next three years”
“Whoever is producing lithium in the coming three years is going to make abnormally high margins,” Chido said.
Lithium prices have risen tenfold to $75,000 a tonne since the beginning of 2021. A tight market has sparked a rush by carmakers to secure supplies of a commodity that, along with cobalt and nickel, is vital for electric vehicles.
Chido revealed that Ionosphere is one of the new battery metals companies to do value addition and it supported the move by the government to outlaw raw Lithium exports.
“Ionosphere Investments is uniquely positioned as one of really only new battery metals companies to do value addition and is in support of the government’s decision to ban the export of raw lithium.
