Scramble for lithium dominates licences issued by ZIDA

In what is clear testimony to the global lithium boom and Zimbabwe’s potential as a key resource base, the Zimbabwe Investment and Development Agency (ZIDA), issued 42 licenses to lithium investors in the first quarter of year 2023 alone, Business Weekly can reveal.

This constitutes 36 percent of the total 116 licences that ZIDA issued across all sectors during the period under review.

The investments in the lithium sector have a potential investment value of $301 million and are in addition to 31 licences with potential investment value of $497 million issued the whole of 2022.

According to ZIDA, the global boom in renewable energy has seen an increase in the number of investor inquiries into the sector, with processing of applications underway.

The investment promotion body said licences in the lithium sector were issued for prospecting, mining and processing.

“The strong trend began in 2022 and is expected to continue for the rest of 2023 and beyond,” reads part of ZIDA’s 2023 Q1 Report seen by this publication.

The resource-rich country also recorded further investments in the mining sector where an additional 21 licences with potential investment value of US$32,86 million.

Speaking at a media engagement on Wednesday, ZIDA chief executive officer Tafadzwa Chinamo, said in terms of investment areas, “Without doubt mining outstrips any other investment area”.

“We are looking really, I think, in lithium, I think every other licence we are having now is in lithium processing, prospecting and so forth,” said Chinamo.

He, however, said other sectors had not done badly with manufacturing “also doing quite well.”

A total 28 licences with a potential investment value of US$61, 12 million, were issued in the manufacturing sector in addition to 46 licences valued at US$919 million issued the whole of 2022.

The period under review saw ZIDA issue the highest number of licences quarterly since the first quarter of 2022.

A total 116 licences were issued in the first quarter of 2023, which is higher than the 89 licences issued in the last quarter of 2022 and every other quarter.

The issued licences were out of 219 applications received, also the highest since the first quarter of 2022.
Chinamo said ZIDA is signing no less than 15 to 20 licences per week.

In total, the 116 licences issued in the first quarter of 2023 had a potential investment value of US$761 million with US$154 already invested.

According to ZIDA, the actual investment figure of US$154.5 million was comprised of capital equipment from abroad of US$64,4 million, equity US$26,86 million, loans US$2,41 million and local assets US$60,77 million respectively.

Chinamo said although most people look for cash brought into local banks as evidence of actual investment, ZIDA considers other forms of investment such as capital equipment, labour, and technology among others.

“So we record all those things. But we always put a value on that,” said Chinamo.

Overall, most of the investors favoured Harare with 41 licences with potential investment value (PIV) of $283,8 million. Mashonaland East and Matabeleland North came second and third with PIV of US$176 million and US$163.43 million.

In Q1 2023, the country managed to draw investors from 20 countries. During the period, as was the case in 2022, investors from China were the most by a considerable margin with mining being their preferred sector, in particular lithium.

PIV from China was US$295.48 million, India US$13,66 million, UK US$6 million and United States of America US$164,5 million.

Domestic investors weighed in with US$30,83 million in addition to US$72, 75 million in 2022.

Chinamo said although ZIDA has started recording domestic investments it will only be able to capture those is licenced through the Agency.

“We are getting to a stage where we are also encouraging local investors to register with us and once they register with us we are hoping we will start sharing such information. The benefits we believe are plentiful,” said Chinamo.

Meanwhile, ZIDA has US$30 billion worth of infrastructure projects or investment opportunities that it is promoting including new city development, and water and sewerage reticulation among others.

Another US$30 billion worth of investment projects are lined up for urban development across the country.

At least US$3 billion is needed in the health sector and another US$3 billion in the tourism sector according to ZIDA’s chief investment promotion officer Silibasiso Chizwina.

Silibasiso Chizwina said ZIDA has set a target to bring investments into the country worth US$4 billion in 2023.

Of that amount, US$1.5 billion is expected to come from FDI, US$500 million from domestic investors and US$2 billion from reinvestments from those already invested in the country.

“These are targets based on data that we have managed to collect in the last three years as ZIDA,” Chizwina said.-ebusinessweekly