Zimbabwe lithium sector faces mounting challenges
Despite the significant potential of lithium mining in Zimbabwe, the industry continues to operate in a challenging environment characterised by several risks, one of the top producers has said.
Fragile power supply, capital constraints, foreign currency shortages and the loss of value on the surrender portion of export proceeds, coupled with high production costs, pose significant hurdles for lithium companies,” Bikita Minerals said in a presentation to the Parliamentary Portfolio Committee on Mines and Energy recently.
Currently, lithium companies are subject to approximately 9 percent in taxes before exporting their products, with these taxes levied by various Government departments. The absence of tax incentives or holidays to stimulate value addition and new capital investments further discourages growth and development in the sector.
“Lack of basic infrastructure, such as roads, transportation, power, and water supply in lithium-rich regions is hindering exploration and extraction of lithium reserves, significantly influencing production costs,” said Bikita.
Moreover, the absence of clear and consistent policies on licensing, taxation, and export regulations creates uncertainty and deters investors from entering the Zimbabwean lithium market.
Addressing these challenges, the company said it was crucial for the sustainable growth and development of the lithium mining industry in Zimbabwe.
Bikita is the number five exporter in the mining industry and contribute about 6,4 percent of sectors’ export receipts.
The company said it would continue investing in exploration and new mining development, while focusing more on value addition and beneficiation.
To achieve this, it has implored Government streamlining the regulatory framework, implement a more streamlined and transparent policy framework to create a stable environment for investors.
It also urged the Government to utilise Public-Private Partnerships (PPPs) to improve transport infrastructure and prioritize funding for critical projects to support the growth of the lithium sector.-ebsinessweekl
