When I asked the Minister of Mines and Mining Development, Winston Chitando, for a list of the mines the Brick by Brick magazine team was going to visit to see the “bricklayers” in the mining sector at work, he was in a quandary. After a long silence, he said: “To be honest, there is so much happening in the mining sector that if I give you all the mines I would want you to visit, then the whole magazine will be on mining. There are just too many positive developments in the industry.”
Coming face-to-face with the bricklayers in mining
At the Brick by Brick magazine, we don’t practise armchair journalism. We believe in going where the action is and talking to the “bricklayers” on the ground to give our stories a human face. And so when Minister Chitando said there was a lot happening, not in boardrooms, but on the ground, that tickled my curiosity. I wanted to visit every corner of our mineral-rich country to see the mining “bricklayers” at work. However, after a lengthy chat with the Minister, we came to the mutual conclusion that a comprehensive analysis of developments in the industry would require a standalone publication. In the interim, we agreed that the team would visit seven mines where investors had just poured in millions to capitalise their projects.
While the main theme in this edition is mining, there is also extensive coverage of developmental projects in Mashonaland West and Matabeleland South. We have fascinating stories from the two provinces that prove beyond reasonable doubt that the Second Republic is sincere when it preaches that it is “leaving no one and no place behind” in terms of development.
Even with political and media polarisation blinding some people, the developmental projects in Mashonaland West and Matabeleland South speak for themselves. It’s the kind of stuff that one never comes across while seated in some newsroom or twiddling fingers ad infinitum on social media. Enjoy the inspirational stories, dear reader!
Pardon the digression. Back to Minister Chitando. Since it was virtually impossible for the Brick by Brick magazine team to cover everything that was happening in the mining sector, given tight publication deadlines, the Minister came up with the following shortlist: Manhize Iron and Steel Mine, Murowa Diamonds, Zimasco, Pickstone Peerless Mine, Eureka Mine, Sabi-Star Mine and Zimplats. “You can visit these seven mines, but I am feeling very bad because there are quite a number of mines that are doing very well that we have left out,” said Minister Chitando, sounding like a parent who doesn’t want to be seen showing favouritism towards some of his children at the expense of others.
Minister Chitando has a long history and extensive knowledge of Zimbabwe’s mining industry and so I can understood his predicament.
With the Minister’s blessings, the Brick by Brick magazine team was soon on the road. And what an experience we had at the mines! Dear reader, take time to know your country. Amazing things are happening on the ground.
Let me declare without any reservations – Zimbabwe, in general, and President Mnangagwa, in particular, will soon surprise the world! Even those who hate President Mnangagwa will find it very difficult not to praise him for the revolution he is spearheading in the mining industry. What I saw on the ground blew my mind!
President Kagame’s wise words to Africa
Not so long ago, Rwandan President Paul Kagame made a profound observation which needs repeating here for the sake of posterity: “Why should someone print paper and hand them over to Africa and require us to pay back, not with another paper but our resources? I have come to the realisation that this is an act of modern slavery and colonisation.”
President Kagame couldn’t have said it any better. Indeed, Africa has been subjecting itself to modern-day slavery and colonisation by mortgaging its rich mineral resources in exchange for some pieces of paper known in monetary terms as fiat money. Fiat money is a government-issued currency that is not backed by a physical commodity such as gold or diamonds. Examples of fiat money include the US dollar and the euro.
In short, through fiat money, the issuing governments are creating an illusion of wealth through printed paper, because their currency has nothing to back it in physical terms. Unfortunately, for years, Africa has developed an insatiable appetite for this illusion and has been shipping its mineral wealth to the developed world in shocking quantities, simply to buy this perception. Cry my beloved Africa!
Zimbabwe says “NO” to modern-day slavery and colonisation
While President Kagame’s observatiion was quite revealing, it’s sad that many African countries are still subjecting themselves to modern-day slavery and colonisation. Our mineral resources continue to be plundered and looted in exchange for fiat money; and the patriots cry, “For how long! How much longer will this plunder and looting continue? How long will the world’s richest continent, Africa, continue being the poorest?”
Amid the exploitation, Zimbabwe, as it has always done when push comes to shove, has decided to declare to its erstwhile colonisers and their allies that enough is enough. The country has taken a pioneering role, showing the continent, in practical terms, that the time for mortgaging its mineral resources in exchange for fiat money is over. With no apologies, Zimbabwe has revived resource nationalism to ensure that Zimbabweans get maximum benefit from their mineral resources.
For those not in the know, resource nationalism refers to policies that countries adopt in a bid to boost their share of the profits from the extraction of their God-given natural resources. The term arose with reference to the nationalisation of oilfields in Mexico and the Persian Gulf. These countries came up with policies to safeguard their oilfields against multinational companies that put profit above national interests.
Zimbabwe has resorted to resource nationalism at a time when the gods are smiling on it as evidenced by the recent discovery of strategically important minerals like lithium, oil and gas. The Second Republic is revolutionising the country’s mining sector by enacting laws and coming up with policies to ensure that Zimbabwe benefits from the exploitation of its natural resources.
Of course, some critics say resource nationalism conflicts with the interests of multinational corporations and it’s possible that these corporations will put up spirited fight, but that should not stop the revolution. After almost three decades under ruinous illegal economic sanctions imposed by the West, now is the time for Zimbabwe to use its minerals to rise and shine! And Africa should take notes.
The gods are smiling on Zimbabwe
Before outlining the unstoppable revolution going on in Zimbabwe’s mining sector, it is important to briefly acknowledge how God has been smiling on Zimbabwe in recent years. Several geological surveys before and after independence in 1980 have shown that Zimbabwe is endowed with over 60 minerals ranging from gold, diamonds, chrome, platinum, coal, copper and granite deposits.
It’s not an exaggeration to say the abundant mineral deposits make Zimbabwe one of the richest countries in the world in terms of natural resources. However, for years, the Southern African nation has been falling short when it comes to reaping the benefits on its rich resource endowment.
In a wide-ranging interview published elsewhere in this magazine, President Mnangagwa justifiably brags about the country’s riches. This is what he had to say: “Well, what is unchangeable is the fact that Zimbabwe is blessed with numerous minerals. Usually, the question is what don’t we have rather than what do we have? We have a long list of minerals in the country.”
President Mnangagwa has every reason to beat his chest because since 2018, the gods have been smiling on Zimbabwe as the country has discovered mineral deposits that have seen multinational corporations making a beeline for Harare. Even the country’s enemies are turning green with envy on realising that Zimbabwe has finally found a way to grow its economy despite the illegal sanctions.
Just 24 months after his ascendancy to power, President Mnangagwa stunned the jealous world when he announced that Australian firm, Invictus Energy, had discovered oil and gas deposits in Muzarabani, Mashonaland Central Province. It was the first definitive discovery in the country’s history and one poised to be a game-changer. Although there have been some teething challenges, the fact remains that Zimbabwe is endowed with large deposits of oil and gas. It’s only a matter of time before the country becomes a leading producer, if not exporter, of these two key fossil fuels.
A key stakeholder in the oil and gas project, Paul Chimbodza, recently told the media that Invictus Energy would forge ahead with the project despite fears from some quarters that the company might strike dry seams in Muzarabani. Chimbodza said Invictus was pursuing a multi-commodity business model in the project, which allowed it to extract gas, in case the oil seams proved unviable.
As if the discovery of the oil and gas deposits was not tantalising enough, Zimbabwe hit the jackpot when massive deposits of lithium were discovered at various locations dotted around the country. Described in commodity markets as the “new oil” in terms of its global strategic economic importance, Zimbabwe’s lithium figures are quite staggering. For example, Bikita Mine, located 308 kilometres south of the capital, Harare, reportedly has the country’s largest lithium mines with estimated reserves of 10.8 million tonnes of ore.
Zimbabwe is projected to become one of the world’s largest lithium exporters, with the government hoping to meet 20% of the world’s total demand for lithium when its exploitation reaches full throttle.
Lithium is the “new oil” and investors are flocking to irresistible Zimbabwe
Research shows that as the world shifts to clean energy, especially electric mobility, lithium has become a critical component in high energy-density rechargeable battery manufacture due to its high electrochemical potential. Across the world, battery makers anticipate that lithium-ion batteries will keep dominating the industry as they are now about 30 times cheaper than when they first came onto the market in the early 1990s.
In the meantime, lithium prices have surged more than 1,100% to record highs over the past two years. The value will continue to increase as electric vehicles replace traditional combustion engines. Bloomberg reports that half of all car sales could be electric vehicles by 2030, up from just 9% in 2022. Indeed, lithium is the “new oil” and Zimbabwe has every reason to anticipate a very bright future.
Speaking during a press briefing in Abuja, Nigeria, recently, the Solid Minerals Development Fund (SMDF) board chairman, Uba Sa’idu Malami, revealed that lithium would soon replace oil as a strategic economic resource across the globe. He, therefore, urged Nigeria to formulate policies to pave way for full control of the entire lithium value chain in order to reap maximum benefit from the scramble for Nigerian lithium.
Said Malami, who is also the co-founder of the Geological Society of Nigeria (GSN): “Lithium is the new oil that could significantly control global wealth and economy of nations in the coming decades,” adding that the new economic order would be largely dictated by the ability of nations to take advantage of emerging opportunities afforded by lithium resources.
“Diesel and gasoline were the energy source of cars for decades. Now, [the world] is migrating from the hydrocarbon to battery-charged cars, otherwise known as electric cars. So, the energy required by cars are the batteries, while lithium is the key component of batteries,” said Malami.
Realising that lithium is the future and that Zimbabwe is endowed with rich deposits of the mineral, Chinese companies are already stampeding to invest in Zimbabwe. Among them are Zhejiang Huayou Cobalt, Sinomine Resource Group and Chengxin Lithium Group who, between them, have poured a combined US$679 million into their Zimbabwe-based lithium projects.
Chinese billionaire Pei Zhenhua (64), whose net worth is estimated at US$10.3 billion, was recently in the country to assess his investments. Pei is not a minnow in the business world. For starters, he is the chairman of Suzhou TA&A Ultra Clean Technology Company, a Shanghai Stock Exchange-listed firm, which provides antistatic cleaning technology. The majority of Pei’s fortune is derived from his stake in Contemporary Amperex Technology Company, a battery products manufacturer, which is the largest supplier of electric vehicle batteries in the world. The company’s revenue was a jaw-dropping US$20.2 billion in 2021.
Pei, who also chairs the board of the multi-commodity mining and natural resource development company, Premier African Minerals (PAM), flew into Zimbabwe in his private jet to assess progress at his high-impact Zulu Lithium Project, in Fort Rixon, Insiza District, Matabeleland South Province. The site of the project is regarded as potentially the largest underdeveloped lithium-bearing pegmatite in Zimbabwe, covering a surface of about 3,500 square kilometres, which is prospectively for lithium and tantalum mineralisation.
In 2022, PAM secured US$35 million in pre-funding from Suzhou TA&A Ultra Clean Technology Company to fund the construction and commissioning of a large-scale pilot plant in Zimbabwe. “Zimbabwe is a safe investment destination and I am confident that this lithium project will be a success,” the billionaire was quoted as saying at the time.
Pei has other investments worth US$30 million in Mutoko, Mashonaland East Province. Plans are in the pipeline, through a joint venture between Mutoko Mineral Resources and Pei’s Suzhou, to set up a lithium ore processing plant in Mutoko in the next 12 months. “We are very much pleased to be in Zimbabwe at this particular juncture as we have come to make a huge investment through building a lithium processing plant in Mutoko that will increase the country’s foreign currency earnings as well as boost employment opportunities,” says Pei.
If billionaires like Pei are finding Zimbabwe so irresistible and pouring millions of dollars into the country, surely what other confirmation do we need to show that the Second Republic has struck the right chord in terms of growing the economy? Zimbabwe is no longer talking about economic revival. We are now talking about unprecedented and irreversible economic growth.
It’s not only lithium that is sweet, the whole mining sector is getting sweeter
The lithium story in Zimbabwe is so exciting that in recent months it has overshadowed other minerals, but the overall performance of the mining sector shows that the entire industry is getting sweeter. No wonder, it is fast becoming one of the main pillars of the economy as the country marches stridently towards Vision 2030.
In his interview with the Brick by Brick magazine, President Mnangagwa was upbeat as he summed up the mining sector’s phenomenal growth. “As you will probably know, earnings in the mining sector from the time the Second Republic came in was around US$2.8 to US$2.9 billion per year. Now we are around US$7.7 billion per year. In 2023, when most of the new and old mines will be in full operation, we should be able to clock US$12 billion per year.
“This growth from about US$3 billion to about US$12 billion demonstrates the fact that we have a really sound mining sector in the country and that foreign companies are feeling safe to invest in Zimbabwe,” the President said.
According to Minister Chitando, the other minerals that are expected to contribute significantly to the country’s economic growth towards an upper middle income economy by 2030 include gold, platinum group of metals (PGMs), chrome and ferrochrome, nickel, diamonds, coal and hydrocarbons.
“The mining sector is growing/expanding through a number of interventions including new investments, increased mineral exports, value addition and beneficiation, opening of new mines, resuscitation of closed mines and increased capacity utilisation of existing mines,” the Minister told the writer in an interview with Brick by Brick magazine (see full interview on Pages ……)
The chief executive officer at the Chamber of Mines of Zimbabwe, Isaac Kwesu, was equally buoyant in his assessment. “The performance of the mining sector in 2022 was generally encouraging with preliminary production statistics showing that most key minerals recorded output increases in 2022, compared to 2021. Lithium (64%), gold (21%), coal (21%) and diamonds (25%) are estimated to have recorded notable output growth rates for the comparable periods.
“The strong performance was largely supported by ongoing expansion projects, resuscitation of closed mines, and new projects across some of the key mineral subsectors. Government has been consistent in its messaging on investment protection and attraction. This has lowered country risk resulting in the improvement of perception on investing in Zimbabwe,” he said. (See pages ….. for the full interview)
As part of Vision 2030, the government intends to shore up mineral exports to US$12 billion this year, with gold projected to account for US$4 billion, platinum US$3 billion and chrome, iron and steel, diamonds and coal each contributing US$1 billion, while lithium and other minerals are expected to rake in no less than US$2 billion.
The growth of the mining industry in Zimbabwe over the past four years has become so exponential that it’s difficult to imagine that when President Mnangagwa launched the US$12 billion mining target on 23 October 2019, some sceptics thought Minister Chitando had sold the President a dummy in a bid to impress the Head of State. In fact, President Mnangagwa is now convinced that “we are going to bust that target”! And, given what the Brick by Brick team witnessed on the ground, the question is: Why not?
Resource nationalism in action in blessed Zimbabwe
With God smiling down on Zimbabwe and as investors flock to the country, the government has moved in to ensure that the country reaps maximum benefits from its mineral resources. The Second Republic has come up with a raft of Statutory Instruments and policies that compel companies in the mining sector to beneficiate and add value to the minerals they are extracting.
These game-changing measures by government will see enhanced exploration of the country’s minerals, improved productivity, more exports and foreign currency earnings and growing employment figures. It’s now abundantly clear that resource nationalism is the only way for Zimbabweans to enjoy their country’s rich resources to the full. More importantly, the country has to safeguard its minerals and metals because they are finite resources.
In 2021, the Ministry of Mines and Mining Development unveiled the “use it or lose it” policy, in terms of which the government is entitled to repossess underutilised mining concessions. Estimates show that in 2022, over 80 mining concessions were successfully repossessed under this policy. Fear of losing concessions saw a rush to turn idle claims into hives of activity and hence improved productivity in the mining sector.
As President Mnangagwa’s calls for value addition and beneficiation took effect, at the beginning of July 2022, the government banned the export of unprocessed granite through Statutory Instrument (SI) 127 of 2022. Estimates showed that the country was losing over 300% of potential revenue to exports of unprocessed granite.
July 2022 also saw the government introducing the Mosi-oa-Tunya gold coins as it moved to stabilise the local currency while also providing a viable alternative store of wealth alongside the US dollar. According to the naysayers, the country did not have sufficient gold reserves to sustain the demand for the gold coins. But the doubting Thomases, who included the International Monetary Fund (IMF), were forced to eat humble pie when government proved to all and sundry that it had the capacity to walk the walk.
If this was a master stroke, then the best was yet to come. Before the year was out, government moved a gear up with the promulgation of Statutory Instrument 189 of 2022 under which mining royalties will be paid in both cash and kind. Prior to that, all such royalties were paid strictly in cash. The 50% monetary component will be paid as follows: 40% in the Zimbabwe dollar (ZWL) currency and 10% in foreign currency. The mineral royalties will be submitted to the Reserve Bank of Zimbabwe (RBZ) in their final processed form – no ores allowed. The mineral royalties apply to gold, diamonds, PGMs, lithium and all other minerals deemed to be of strategic importance.
The country’s enemies were stunned by this bold move by government and, as usual, they scrounged around for loopholes. This was an own goal, the cynics scoffed, citing what they called the limited (or non-existent) refinery capacity in Zimbabwe. Again, the prophets of doom had been caught at sixes and sevens.
In December 2022, government gazetted SI 213 of 2022, the Base Minerals Export Control (Lithium Bearing Ores and Unbeneficiated Lithium) Order, 2022 banning the export of lithium ore and unpurified lithium salts, except in situations where the producer proved that there were special circumstances. The SI is meant to implement the general policy of the Second Republic that mineral exports should be beneficiated within Zimbabwe to the standard levels required for international trade. This value addition will create jobs as well as making the export much more valuable.
At the beginning of the year, government showed that it was taking resource nationalism very seriously when it gazetted SI 5 of 2023. CAP. 21:05 Base Minerals Export Control (Unbeneficiated Base Mineral Ores) Order, 2023.
Part 3. (1) of the SI reads: “No unbeneficiated base mineral ores shall be exported from Zimbabwe to another country except under written permit of the Minister given in either of the following circumstances on written application to him by any miner or other interested person.”
Effectively, this means Zimbabwe has created invisible protection walls around its mineral resources for the benefit of its citizens. Mining companies will have to build processing plants in Zimbabwe. If they can’t build the processing plants, then they have to come up with modalities to ensure that they comply with the country’s laws. This can only be good news for Zimbabweans.
To show that the Second Republic means business, government has already signed an agreement with Eagle Canyon International Group to build a Mines to Energy Park in Mapinga, which will be the first of its kind in the world. The park will house several mineral processing plants and contribute significantly towards Vision 2030.
To spice up the revolution in the mining sector, Zimbabwe, as the current chair of the Kimberley Process Certification Scheme (KPCS), will be spearheading the diamond sector reform agenda for the benefit of over 50 KPSC members until next year. All eyes will be on Zimbabwe this year as the country is scheduled to host two KPCS meetings to be attended by global diamond mining delegates in May and November.
Of course, the pessimists will whisper that it will take time and millions in foreign currency for Zimbabwe to have its own processing plants. They will also work overtime to scare investors by poking holes in resource nationalism, but one thing they can’t do is stop the unprecedented growth of the country’s mining sector. Resource nationalism is taking Zimbabwe to the Promised Land, and there is no going back.
Mining has never been this sweet! Enjoy the country’s brick-by-brick journey in the mining industry!
