Online Reporter
THE process of adding value to Zimbabwean minerals before they are exported is continuing and rapidly becoming part of the “new normal” with very little raw ore going out of the country, but rather containers of processed products or ingots of metals.
This new normal was shown off this week in Masvingo, where major mining companies invested in the province have been backing the Government policy of beneficiation and value addition. This adding of value does require people to do the work, but the investors have found that the good Zimbabwean educational system provides plenty of young people who are eminently trainable to do the skilled work required, so the country gets the double benefit of more valuable exports and the creation of good jobs.
There are additional benefits in that some of the mining can be contracted out to small-scale miners, again increasing employment.
Of course every growing community in what can be regarded as a new town around a mine supplies markets for local farmers. Zimbabwe’s nascent mining supply industry, hit hard at one stage, now has potentially ever more customers for its own value addition.
One major mine in Masvingo, Bikita Minerals, that opened around a century ago and was for long the sole Zimbabwean lithium mine, has grown dramatically since it was bought by a new investor, Sinomine Resource Group, almost exactly three years ago in January 2022.
It has since spent several times the US$180 million purchase price to expand production of the two basic hard lithium minerals in what is regarded as the largest single lithium deposit in the world.
Last year it commissioned a 12MW solar plant, to provide a good slice of its electrical energy, and commissioned a new high-capacity power line and connection to the national grid.
This has allowed many others to connect to the grid in Bikita district, a fairly undeveloped area until recently with half the district once being a single ranch that relied on its vast area to maintain cattle with little infrastructure.
Also last year, President Mnangagwa went to the mine to commission the new value-add plant for the main two lithium minerals.
This not only helps Zimbabwe, but Sinomine now has severely reduced transport costs, which are expensive when stuff has to be trucked out of Bikita, by switching from ores to semi-refined products that need a lot less truck space since the waste rock is left behind. Once again this is good business and Zimbabwean benefits are the same.
Sinomine Resource’s investments include effectively building the small town around the mine and processing plant, with 300 houses and a decent clinic. While some of this investment can be seen as service to the local community, most Zimbabwean major mines have found over the years that few mineral deposits are next door to major urban centres, so there is a need to have a new town where staff can live with their families and essential services can be laid on.
So this sort of development is often a cost-effective business decision as well. Again, everyone wins.
The other major development highlighted in this week’s tour was the new US$60 million chrome smelting plant in Mashava.
The plant processes chrome ore, and converts it to far more valuable ingots of ferro-chrome for sale and shipment. This has created over 230 direct jobs for Zimbabweans as well as making the exports a lot more valuable.
The lower chrome output during the UDI era was all converted to ferro-chrome before export, using cheap surplus power from Lake Kariba.
After independence the far greater industrial development absorbed more power and more commercially-priced power was needed. The then chrome smelter owners backed out and Government had to allow a lot of chrome to be exported as ore.
New investors have not only reanimated the old plants, but have been adding capacity, as at Mashava, for the increased mining and markets, using more efficient methods. They have even been building their own power station, so they have secure power supplies, and Zimbabwe has once again banned exports of pure ore.
There will be a growing local market for Zimbabwean ferrochrome and nickel as the new steelmaking complex at Manhize moves into production of stainless steels.
Around 30 percent plus of most stainless steels consist of chrome and nickel so as the Dinson works move up the ladder there will be a huge demand for other minerals besides the basic iron ore and coke, and the final exports will be exceptionally valuable high-grade steels, giving maximum value addition and revenue.
Again all this industrial processing needs a lot of skilled Zimbabweans, so more decent jobs are created, and those workforces and their employers buy goods and services, so the whole business world wins.
The intermediate products are also available to manufacturers downstream, so in the end a significant portion of the iron, chrome and nickel mined in Zimbabwe is exported as manufactured goods.
This is one reason why, being a major lithium producer, Zimbabwe is looking at going beyond refining the lithium down to the products and salts needed by battery manufacturers and starting battery manufacture locally.
The second most important material after lithium is nickel, plentifully available, and the small amounts of cobalt needed as the third material are easy to buy around the corner in Zambia and DRC’s Katanga province.
Mineral production in Zimbabwe will always be far higher than local manufacture could ever absorb, even when a lot of industrial output is exported, but by ensuring that when the raw materials are exported they are exported in the standard processed form required by global markets, we will obtain full value, and the miners will be doing better business than trying to truck out low-value high-bulk goods instead of high-value low-bulk goods.
