“White petroleum’’ Set to Transform Zimbabwe’s Economy

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BOSTON, MA - JUNE 6: The Tesla Model S in the Globe parking lot. (Photo by Aram Boghosian for The Boston Globe via Getty Images)
BOSTON, MA - JUNE 6: The Tesla Model S in the Globe parking lot. (Photo by Aram Boghosian for The Boston Globe via Getty Images)
BOSTON, MA – JUNE 6: The Tesla Model S in the Globe parking lot. (Photo by Aram Boghosian for The Boston Globe via Getty Images)

 

By Barnabas Thondhlana

Lithium – a previously little-known mineral so-called “white petroleum’’ that powers rechargeable devices including telephones and automobiles – is set to transform Zimbabwe’s economy following a fresh scramble for the mineral by foreign companies, Mines and Mining Development Deputy Minister, Engineer Fred Moyo has said.

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Lithium is mainly used as a component of rechargeable Li-­ion batteries and as a treatment for several types of mental disorders. Its use in Li-­ion batteries is perhaps the most common and most important use. It is found in rechargeable batteries that power cellphones, smartphones, tablets, laptops, digital cameras, and even electric cars.

It is also found in non­-rechargeable batteries, which provide power for clocks, heart pacemakers, and various toys. As lithium carbonate, it has been prescribed for conditions such as manic depression and bipolar disorder. It acts on the nervous system, and it can modify actions and behaviour.

It is also used as an alloy mixed with aluminium, so that it can strengthen aircraft. This alloy can also be used for high­-speed trains and high-­quality bicycle frames. Lithium fetches $7 475 per tonne on the international market.

Eng Moyo said there were new deposits of lithium in areas surrounding Harare and foreign companies have been jostling for mining licences. He said government was shifting focus to lithium following an increased demand for the mineral worldwide, adding that this could be a breakthrough for Zimbabwe.

“There is a scramble for lithium. Right now we have a lot of lithium potential around Harare.

“Foreign companies are scrambling for lithium around Harare in the similar manner that European countries scrambled for Africa. The world is going to be run on the basis of batteries. We are hoping that that sector will take off. Zimbabwe has vast deposits of lithium,” he said.

Zimbabwe, with a 2015 output of 900mt is the world’s fifth top producer of lithium, after Australia, Chile, Argentina and China. Zimbabwe produces more than Portugal, Brazil, and the United States.

“Kamativi Tin Mine has three very big resources of lithium. Bikita Minerals are on an expansion drive. We also have some lithium deposits in Mberengwa, Mutoko and around Harare. Lithium has a big potential because the future is lithium,” Eng Moyo said.

He said government was pinning its hopes on the revival of Kamativi Tin Mine and the expansion of Bikita Minerals as these are some of the biggest lithium mines in the country with vast deposits. He said government would speed up the finalisation of the Kamativi deal that would result in the Matabeleland North-based mine resuming production after 21 years.

“The main agreement has been sealed. We are now looking at the technical agreement, the funding agreement, marketing agreement and many other issues.”

The growth in lithium demand is predicted to soar over the coming years, partly because of the increased adoption of electric cars, which can use thousands of lithium-ion batteries each. By 2020 the global market for lithium-ion batteries will jump to about $40 billion from $24 billion last year, according to Citi Research.

World lithium consumption is expected to double by 2020, according to Cormark Securities.

Tesla Motors, Inc. – an American automotive and energy storage company that designs, manufactures, and sells electric cars, electric vehicle powertrain components, and battery products – which plans to mass-produce its Model 3 battery-powered car, have stoked worldwide demand. Tesla estimated its production target for electric cars alone – 500,000 vehicles by 2020 – could require as much lithium as is already currently being produced.

Such projections are driving investor interest in lithium, which was the only commodity to increase in price last year. The cost has skyrocketed to $6,400 per ton globally and reportedly to as much as $13,000 on some orders in China.

On the ground, Premier African Minerals has begun looking for partners to expand its Lithium and Tantalum mining operations at its Zulu Project in Zimbabwe.

George Roach, Premier’s chief executive officer, said preliminary talks were aimed at identifying parties who might be interested in supporting development.

Premier’s flagship mine is the RHA Tungsten Mine in Zimbabwe and the company has mineral projects across Africa.

Another company, Prospect Resources Ltd., has secured diamond-drilling services for its recently acquired Arcadia Lithium Project in Zimbabwe. The project has set a target of extracting up to 18 million tons of 3 – 5 percent lithium.

The company said it has raised $2 million of $16 million needed to fast-track exploration.

Increased lithium production could be a boon for Zimbabwe’s struggling mining sector.

The Chamber of Mines of Zimbabwe told a recent conference of mining executives that the sector is fragile because of low mineral prices on global markets.

The depressed prices, combined with liquidity challenges as well as power and capital shortages, have resulted in many mining companies struggling to break even.

The sector produces 10 percent of the nation’s gross domestic product and 50 percent of its foreign direct investment and export earnings.

The Zimbabwean government in 2014 announced plans to build a lithium processing facility, which could lead the way to manufacturing batteries in the country.

Valentine Vera, metallurgy director in Zimbabwe’s Ministry of Mines and Mining Development said the metal had the potential to drive the nation’s economic growth as global demand grew. However, Vera said the country would need to draw significant investment in order to increase production