Export of raw lithium banned Lithium

Exports of lithium ore and unpurified lithium salts have been banned unless the producer can
prove there are special circumstances, and even then exporters would have to pay the special 15
percent export tax, where the normal exporter of purified tradable product would be exempted.

The ban, except for ore samples being sent for analysis, came into effect on Monday with the
gazetting by Mines and Mining Development Minister Winston Chitando of Statutory Instrument
213 of 2022, the Base Minerals Export Control (Lithium Bearing Ores and Unbeneficiated Lithium)
Order, 2022.

The move implements the general policy of the Second Republic that mineral exports should be
refined or beneficiated within Zimbabwe to the standard levels required for international trade,
with this processing adding value to the finite mineral resources and ensuring that the value
addition is done in Zimbabwe, creating jobs as well as making the export a lot more valuable.
While there is a very small amount of trade in lithium metal, this is a highly reactive element that
is very dangerous to store and transport; for example it bursts into flame on contact with water or
excessive moisture.

So most international trade is in lithium carbonate and increasingly in lithium hydroxide now
preferred by battery manufacturers, since these are the salts that battery manufacturers use as
their feedstock. There is also trade in the chloride salt, since this is what brine processors produce.
The London Metal Exchange has now opened trading in lithium hydroxide but not in the metal.
The two commonly traded and safe salts have to be 99,5 percent pure to meet the delivery
standards of lithium users. Officiating at the US$67 million new Central Shaft Expansion Project
and the 12,2 megawatt solar plant at Blanket Mine in Gwanda recently, President Mnangagwa
indicated that the era of reliance on exporting primary products was over.
“We cannot as a country continue to be exporting primary products, including concentrates and
ores. Our people must fully enjoy the benefits of ‘moving up the value chains,” he said. “In line
with Vision 2030 and NDS1, greater efforts should be made towards value addition and
beneficiation of our mineral resources, and primary products.”
In terms of the new regulations, ‘unbeneficiated lithium’ means any lithium in whatever form that
has not undergone processing to an extent that would exempt it from the payment of the 15 percent
export tax under section 12B of the Value Added Tax Act .

The actual lithium products and their level of purity to allow unrestricted export are set under tax
codes, since the export ban cuts in when purity is below the level that ends export taxes. Those
levels can be adjusted in the tax code.

“No lithium bearing ores, or unbeneficiated lithium whatsoever, shall be exported from Zimbabwe
to another country except under written permit of the Minister,” reads the regulations. The only
near automatic exemptions are for samples of lithium bearing ore or unbeneficiated lithium for
assaying outside Zimbabwe, and even these need the permit. The actual tradable production needs
to be purified within Zimbabwe.

However, the regulations said permission may also be granted to a miner or exporter of lithium
upon production of written proof satisfactory to the Minister that there are exceptional
circumstances justifying the export in question.

The minister said another waiver may be on condition that the lithium bearing ores or
unbeneficiated lithium in question have been valued in terms of the Value Added Tax Act for
purposes of payment of the export tax on unbeneficiated lithium.

“That is to say the market value thereof on the date of exportation has been determined by
reference to a reputable metals exchange or its value is reflected on any document required to be
delivered in terms of the Customs and Excise Act for its exportation under that Act,” he said.

The Base Minerals Export Control Act allows the new order to come into effect notwithstanding
anything inconsistent with other law or any trade or customs agreement to which Zimbabwe is a
party.

The same Act, which governs export bans and permits, means that anyone breaching the order is
liable to a fine or imprisonment. The fine is level 9 or twice the value of the base minerals, and the
jail term can be as long as two years.

The massive growth of mining investments under the Second Republic has been creating more job
opportunities across the country while the steady increase in precious minerals output is expected
to continue enhancing economic stability.-The Herald