CHINESE multinationals have poured at least US$1,5 billion into Zimbabwe's aggressively expanding lithium mining sector, as investors from the world’s second biggest economy take strategic positions to build up stocks for Beijing’s electric vehicle (EV) manufacturing plants, according to Zhou Ding, China’s ambassador to Zimbabwe.
Lithium is the latest of a cluster of minerals to attract Chinese investors, many of whom have already taken positions in lucrative assets including chrome and gold.
Chinese firms have also been at the heart of Zimbabwe’s efforts to rebuild its battered infrastructure, building roads, airports, dams and power facilities worth billions of United States dollars.
But the substantial investments into lithium mines would place Zimbabwe among destinations seen as helping bolster China’s EV manufacturers. Lithium is one of the raw materials used in the production of batteries for firing up EVs, whose global fleet has been expanding significantly.
Ding acknowledged Zimbabwean lithium’s crucial role on the global stage, as he fielded questions from businessdigest during the Zimbabwe/China Business Forum in Harare last week.
“In the lithium mining sector, Chinese companies have invested more than US$1,5 billion, making Zimbabwe an important player in global new energy production and supply chain," Ding told businessdigest.
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"I am glad to see that the Chinese private sector, private investments serve as a vital force in boosting the economy of our friend," the Chinese diplomat said.
Three Chinese government linked firms – Sinomine Resource Group Co Limited (Sinomine), Zhejiang Huayou Cobalt Company Ltd (Huayou), and Suzhou TA&A Ultra Clean Technology Co Limited (Suzhou) – have taken control of most of Zimbabwe's lithium mines.
Sinomine operates Bikita Minerals, Huayou runs Arcadia Mine, while Suzhou manages Premier African Minerals.
Ding emphasised the significance of these investments, saying the Chinese firms’ operations would play a strong part in building Zimbabwe's economy.
“China remains Zimbabwe’s largest source of investment and major trading partner,” he said.
“Since 2021, Chinese companies have invested more than US$2,5 billion in Zimbabwe’s manufacturing, mining, agriculture, infrastructure, information and communication technology,” he told businessdigest.
The country's projected annual lithium production for the year stands at 3,6 million metric tonnes (mt), which is expected to rise to five million mt next year.
A metric tonne this year was selling at US$13 000 on the global market, and is expected to drop to US$11 000 in 2025.
The Chinese diplomat was optimistic about the future, noting how the private sector’s investments were contributing to Zimbabwe's economic development.
This sentiment reflects growing trade between China and Zimbabwe, which is dominated by lithium, gold as well as tobacco and reached approximately US$3 billion during the first nine months of this year, according to Ding.
“Despite the illegal sanctions, climate-induced droughts, and a stagnant world economy, Zimbabwe has scored many successes in increasing its domestic production and attracting massive foreign investments," the diplomat noted.
"Zimbabwe’s GDP (gross domestic product) rose to 5,3% in 2023, making Zimbabwe one of the fastest-growing economies in Southern Africa. Exports grew by 10% year-on-year in 2023 to US$7,2 billion. The ongoing economic growth bore testimony to the success of Zimbabwe’s open for business policy and its dynamic diplomacy of engaging with global partners, including China.
"The past years have seen fruitful results in China’s and Zimbabwe’s comprehensive strategic partnership and cooperation.”
ZimTrade chief executive officer Allan Majuru also said China had become one of Zimbabwe’s biggest trading partners.
“If you look over the years, China has become one of our biggest trading partners, being in the top three in terms of exports and imports," Majuru said.
"As for investment, there is a lot of investment that is coming from China, but what is of significance is the imports.
“The bulk of the imports that we are getting from China are raw materials, which we are already exporting, some used for local consumption, but also equipment and machinery for manufacturing and mining. The key interesting thing is the economic partnership agreement that is going to be put in place between China and Africa, that is going to work on removing tariffs and issues that impede trade," he said.
"As we export, more than 80% of our macadamia goes to China, and there are some taxes that are involved, so sometimes it makes us uncompetitive."
Majuru hoped that the economic partnership agreement would allow farmers to export duty-free.