Africa-Press – Zimbabwe. It has been almost a month since Zimbabwe introduced a ban on the export of raw lithium and concentrates, a measure widely presented as an effort to encourage and speed up local processing and value addition.
The controversial policy has caused considerable concern both domestically and internationally, given Zimbabwe’s important position in global lithium supply chains as Africa’s largest producer and the fifth-largest in the world.
China has long been the main market for Zimbabwe’s lithium, as a long-standing development partner and the global leader in lithium refining, which is essential for electric vehicle batteries, solar energy systems, and consumer electronics.
Over the past five years, Chinese companies have invested significantly in Zimbabwe’s lithium sector, committing an estimated US$1.4 billion for mine development, value addition facilities, beginning with concentration plants and now refineries producing lithium salts. One prominent example is Zhejiang Huayou Cobalt, which owns the Arcadia Lithium Mine in Goromonzi, Mashonaland East.
The Arcadia facility produces lithium sulphate, a milestone for Africa and a reflection of serious investment commitment. Other investors have also explored refinery projects across the country, although such initiatives remain challenging due to Zimbabwe’s economic conditions and infrastructure constraints that affect financial viability.
Lithium producers have been working to meet government requirements while building their operational capacity. However, the recent export ban, which encourages companies to accelerate refinery development ahead of realistic timelines, at the very least the original January 2027 deadline, has raised understandable concerns in the market. If Zimbabwe maintains a firm stance without careful adjustment, the policy may lead to unintended challenges for the sector.
Against this background of substantial Chinese investment and early progress in local value addition, the government’s sudden export ban may prove particularly disruptive to an already delicate industry and costly.
While the industry expressed concerns about the sudden nature of the government directive and its potential impact on revenues, tax payments, and daily operations, a statement from the Chinese Embassy in Harare points to deeper considerations—and the delicate nature of Zimbabwe’s policy approach.
‘Tread carefully’
On Thursday, the Embassy advised Chinese nationals to “tread carefully” when investing in Zimbabwe, encouraging them to apply strong risk management practices following Harare’s decision to accelerate the lithium export ban.
The Embassy reminded Chinese enterprises and citizens “to further strengthen risk prevention and compliance awareness.”
“Prior to making investments in Zimbabwe, investors shall conduct a comprehensive and in-depth assessment of the local business environment, industrial policies and relevant laws and regulations, fully consider various investment and operational risks, and make informed decisions so as to avoid losses resulting from government policy changes,” the statement read.
It added: “In the course of production and business operations in Zimbabwe, Chinese enterprises and nationals shall strictly abide by local laws and regulations, adopt proactive risk prevention and control measures, and protect their legitimate rights and interests through legal channels.”
This statement goes beyond a general caution. It suggests that key decision-makers in China now view Zimbabwe’s policy changes as a concern for investment security, which could influence future capital flows across various sectors. Zimbabwe’s authorities would be well advised to carefully consider China’s message and its potential implications.
In effect, China was gently reminding Zimbabwe: “Be careful what you wish for!”
The Zimbabwean government’s goal of maximising benefits from the country’s natural resources is understandable, often described as resource nationalism—a common approach among developing economies. No responsible resource-rich country wishes to remain only an exporter of unprocessed minerals. Yet policies, however well‐meaning, need to align with market realities, which are changing quickly.
Zimbabwe should avoid allowing regulatory measures to undermine its position in a rapidly evolving global market.
In addition, the country may wish to guard against rent-seeking behaviour by individuals who could benefit from these policy-induced challenges. This calls for thoughtful review of policy implementation to remove unnecessary bottlenecks. With clear timelines, transparent rules, and consistent application, a more balanced approach could reduce risks for compliant investors.
Moving against the grain Zimbabwe’s lithium policy may be poorly timed when viewed alongside two important trends that could affect the future of its domestic industry.
First, China is gradually reducing external dependency by expanding domestic exploration, improving extraction technologies, and investing in new mining projects.
China’s 15th Five-Year Plan (2026–2030) emphasises greater resource self-sufficiency. Even so, China continues to support economic globalisation and stable supply chains. In this spirit, Zimbabwe may benefit from aligning with, rather than opposing, these broader international trends. Since announcing its 15th Five-Year Plan, China has sought greater coordination with global partners for shared economic benefits.
Second, and perhaps more importantly, China may become less reliant on lithium from Africa over time, thanks to its growing domestic reserves and production capacity. China already holds the world’s second-largest lithium reserves, supporting its long-term strategy of securing critical minerals domestically.
Global market observers have noted China’s expanding lithium potential following significant new discoveries.
A report by analyst Alex Kimani last July noted that China has recorded major new lithium finds over the past five years, with reserves rising to levels above those of Australia, Argentina, and Bolivia.
“China is now home to the world’s second-largest lithium reserves, behind only Chile, thanks to a spate of big discoveries,” Kimani wrote.
“According to the China Geological Survey, China’s breakthrough in lithium exploration has boosted its global share of lithium reserves from 6% in 2020 to 16.5% currently, placing it ahead of Australia, Argentina and Bolivia. Since 2021, the country has stepped up efforts in lithium exploration, helping to uncover 30 million metric tons of new lithium ore in Sichuan, Qinghai and Jiangxi.”
China has identified more than 14 million tons of lithium in salt lakes, placing it third globally. Technological progress in lepidolite extraction may also unlock an additional 10 million tons of resources at lower cost and higher efficiency.
Investment in China’s lithium sector has grown strongly. New trading instruments aim to stabilise raw material prices and support sustainable development in the electric vehicle industry. Within a short period, the Guangzhou Futures Exchange’s lithium carbonate contract gained strong market activity, supported by China’s role in the global lithium chain. This evolving control over pricing and standards may reduce China’s reliance on external suppliers, shifting market dynamics.
China places great importance on stable global supply chains, including raw materials and technologies, as they support its industrial and economic development.
Zimbabwe may wish to avoid taking positions that could harm its long-term strategic interests.
Stability as a currency
Beyond potential misalignment with China’s long-term resource strategy, Zimbabwe’s sudden policy changes may weaken the policy consistency that has supported Chinese investment. Zimbabwe may also risk reducing the trust and support of China by appearing less predictable, a perception that has emerged in some quarters.
It is widely accepted that investors, particularly in extractive industries, value stability highly. Policies introduced suddenly or applied unevenly can create uncertainty. Measures that limit short-term returns—such as restricting raw exports before local processing is fully developed—may discourage further investment.
Investors may now exercise greater caution toward Zimbabwe, and the advice from their government represents a serious concern for the country’s economic future. China has been a steadfast partner, and its investments have helped support Zimbabwe through difficult periods despite significant risks.
A reduction in Chinese lithium investment could lead to weaker confidence across infrastructure, agriculture, and energy, where China has been an important partner. Unfortunately, Zimbabwe’s risk profile may limit interest from other foreign investors.
Zimbabwe currently faces economic and political uncertainties that may affect investor sentiment. In this environment, authorities may benefit from reviewing the current policy and adopting a more gradual, rational, and pragmatic approach to support economic stability.
Zimbabwe’s aspiration to develop local value addition is reasonable, but rushing this goal through a blanket export ban may lead to unintended outcomes: discouraging investment, straining relations with key partners, and falling behind in a fast-changing global lithium market. Truly, Zimbabwe must be careful what it wishes for.
Perhaps I lean toward a somewhat pessimistic outlook, but I have long made it a habit to focus on the risks and challenges inherent in national governance and development.
One siincerely hopes that others can offer me more compelling reasons to remain optimistic about Zimbabwe’s future, especially at a time when the country continues to grapple with policy inconsistency.
Tongogara is an economic analyst and business intelligence specialist.
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