Zimbabwe: Lithium-hungry UK, Europe should end sanctions, invest in refining

European companies who have approached Roach seeking an offtake agreement from the company’s Zulu lithium project “have a bit of rethinking to do,” on Zimbabwe, Roach says. Companies should be pushing for an end to sanctions and looking for ways to develop refining capacity in the country, he argues.

Premier African Minerals trades on London’s Alternative Investment Market (AIM). The company’s Zulu lithium and tantalum project in southwestern Zimbabwe is due to start production in the first quarter of 2023. The country is the world’s fifth-largest producer of lithium, which is needed for the batteries in electric vehicles (EVs), as well as a range of consumer electronics.

The International Energy Agency (IEA) says that about 2 billion EVs need to be on the road by 2050 for the world to hit the net zero emissions target, with global EV sales in 2021 standing at just 6.6m. Zimbabwe, Roach says, easily has enough lithium to justify a capability in processing, which is currently dominated by China.

EU sanctions on Zimbabwe were first imposed in 2002 in response to violence against political opponents and the intimidation of journalists. The UK adopted substantially the same sanctions after leaving the EU. The US has a targeted sanctions programme and many international financial institutions have cut ties with Zimbabwe’s banks to avoid having to comply with US Office of Foreign Assets Control (OFAC) regulations.

“Sanctions versus Zimbabwe should be done away with” and it is “nonsense” that they are still in place, Roach says. “They don’t have any place in a peaceful environment. Let’s stop punishing people.”

Refining value chain

Lithium is widely spread globally, but rarely occurs in pure form, so the value is added by processing. The lithium at the Zulu project will be derived from spodumene. Current global prices for spodumene concentrate mean that margins have “dramatically increased” and justify a fast-track to production with less research at the site than would normally be carried out, Roach says. That has been recognised in the offtake agreement for 50% of output signed with China’s Suzhou TA&A, he adds. “Parts of the world are waking up to the fact that China has moved aggressively to secure spodumene concentrate.”

Roach is no hurry to commit the rest of production to offtake, saying he “strongly believes” that Zimbabwe should develop processing capability. There are several steps involved in turning spodumene into battery-ready lithium. Roach wants to be able to offer lithium carbonate, which would still need further processing for automotive battery use.

• He has held discussions with Zimbabwe’s government and potential investors about such a refinery, which he estimates would take about 18 months to build.
• Those who want a better Zimbabwe should do something positive inside the country, says Roach. “You don’t change anything by being on the outside and making a threat.”
• The Zulu project will initially need diesel power, but offers a chance to create solar generation capacity, as well as transport infrastructure which can benefit the region, he says.

New sanctions approach

The outside world is not obliged to trade with a regime regardless of the levels of political violence it uses to hold on to power. That does not change if the regime has minerals that the world needs.

According to the Pretoria-based Institute of Security Securities (ISS), Zimbabwe suffers from “wanton rights abuses, weaponisation of the law and violence” against the opposition and political activists. “The road to the 2023 elections is already littered with violence,” the ISS says.

The opposition Citizens Coalition for Change (CCC) says that its activists in 2022 have been harassed and murdered by supporters of ZANU PF, claims which the ruling party denies.

Though President Emmerson Mnangagwa’s administration has made progress on property rights, sanctions over the long term have failed in improving respect for democracy and human rights, which shows the need for a different approach, the ISS says.

• The Southern African Development Community  (SADC) campaigns against the sanctions, but needs to take the initiative and play an active role is resolving the impasse along with the African Union, the institute argues.
• “What is not an option is the unconditional lifting of sanctions without concessions from the Zimbabwean government or an AU/SADC initiative to guarantee the protection of human rights,” says the ISS.

Bottom line

More African involvement could be the catalyst for improving Zimbabwe’s human rights record, ending sanctions and lifting the country up the lithium value chain.