EDITORIAL COMMENT: Many ways to add value to mineral exports President Mnangagwa officially commissioned the Chinese Sinomine Resource Group-owned Bikita Minerals Spodumene and Petalite Processing plants.

Minerals are Zimbabwe’s largest single set of exports, so anything that at least maintains tax revenue and the inflows of foreign currency is important, along with the building of value and local jobs through beneficiation.

So, while global mineral prices are expected to be easing next year, not collapsing, but coming down off their peaks, Zimbabwe will still earn more money from minerals, both in terms of foreign exchange inflows and in terms of total value.

Some of this comes from the continued expansion of production. The investor-friendly systems brought in at the start of the Second Republic continue to bear dividends. 

There are projects started some time ago coming up to commissioning, and in many areas Zimbabwe has a commercial advantage that the production costs are sufficiently low that even in a so-so year, an efficient miner can make a profit.

The other area that pushes value is the continuous pressure on miners to do more of the initial, and as far as possible the final, processing inside Zimbabwe. 

There are incentives, like an extra tax if you want to export ore or semi-processed product. The Government is not unreasonable, realising that investment is needed in processing plants, that it takes time to build a plant and train the staff. 

But it continually pushes up the stage that has to be reached before the extra tax and other conditions fall away.

Platinum group metals have seen this process extended over some years, with exports being ever better processed concentrates, and the companies involved being open about their investment progress and what they are doing to advance their output to the stage where we export bars of metals. 

With the resuscitation of ferrochrome smelters we have reintroduced the UDI-era ban on ore exports, and producers now export bars of metal alloys, with a desire to go further and push the exports of speciality steels. But at least it is ingots leaving the country now, not dump trucks of ores. 

Diamonds are still a little sticky. While interest has been expressed, we are still not cutting stones in Zimbabwe. 

Since a fair slice of our production is industrial diamonds, presumably the final product here would be fancy abrasives or, combining with the steel industry, the grinding products that manufacturers want. 

But we also need to be able to do some of the gemstone cutting. Now we have joined the small and elite club that mines and sells more than 1 tonne of diamonds a year we need to extract more money.

Lithium has been moving into the spotlight and although we have been mining a little for over a century in the Bikita district, the last few years have seen a lot of prospecting, proving of reserves and opening of mines. Now there are processing plants under construction with the first about to be commissioned. Lithium is traded and transported as a stable salt, rather than bars of exceptionally reactive and unstable metal. 

Most world trade is in lithium carbonate, with purities well above 99 percent desired to it can go straight into a factory without further processing. 

There is a market for lithium hydroxide, an extreme alkali salt, but apparently useful for some battery manufacturing, but whichever one is chosen it needs to be pure, not powdered rock.

Our lithium miners have until the end of March to get their local processing organised, either in their own plants or by contracting those investors who have been building plants. 

It is fairly obvious that investors have been ensuring that they can handle everything every miner can dig up.

This will add serious value to the mineral, and as local processing charges are likely to be below world averages, added to the huge savings of exporting the final factory-ready product rather than a lot more lumpy ore, we do not see the miners being difficult. 

Missing out on an extra tax is another incentive but the main benefit is that they save a lot on transport and quite a lot on processing. Economics can drive the process.

There is perhaps more that the industry in collaboration with the Government and perhaps the universities can do. 

With lithium salts being exported and metal ingots for other minerals there seems to be a need and a market for some serious certification. Minister Ncube, the Reserve Bank of Zimbabwe and even the tax collectors will probably want to know the exact percentages of each mineral in a sack of salts or a bar of metal.

But customers would probably like to see some independent certification of just what they are buying. 

They will, at least in early stages, might want to test the odd sample themselves as the trust factor builds up but it should be easy for Zimbabwe to establish a reputation for quality, that if we say lithium carbonate being sent for export is 99,9 percent pure, then that is the minimum percentage. 

This sort of reputation will do us a lot of good, and add a bit more value.

We also need to be able to certify environmental standards, that the miners dug the stuff up and processed it following global standards. 

Our Environmental Management Agency and the law it implements both follow proper best practice, and we need to blow our trumpet a bit in this regard. 

There is a sustained campaign against lithium, largely driven by those who do not want the world to convert from oil to electric cars, A lot of myths are generated and downright lies told. 

But there are some lithium producers whose sources make it harder to mine the mineral in environmentally acceptable ways, and here as a hard-rock lithium producer Zimbabwe has many environmental advantages.

So we can, and must, make it clear that we have decent environmental mining standards and that our mining companies have to follow them. 

Our one dodgy area, the artisanal gold mining sector, is being cleaned up for safety, community and environmental reasons, but the major mining companies are held to higher standards already.

We need to make this clear and then be able to have properly audited environmental certification. You see this in non-mining products, such as sustainable forestry products, or fair trade tropical products and the like, and it seems about time we could get this sort of thing for mining as well. 

Zimbabwe’s geology and Zimbabwe’s law and practice would appear to give us a commercial advantage here, and that means that even in so-so years our customers will stick with us.

You Might Also Like

Comments

Take our Survey

We value your opinion! Take a moment to complete our survey