An application to mine lithium in Zimbabwe now has to arrive with something else attached: plans for a processing plant that can take the material all the way up to battery grade.
The call came from the Minister of Finance towards the end of last year, and Eric, of the Lithium Association of Zimbabwe, says it started to be enforced in March. It is a bit of a process, in his phrasing, but they are getting there. The response so far from the major players, most of them Chinese companies, has been positive.
The rule works alongside the export ban. There is an allowance inside it: within a certain period, a producer can export a set portion of ore or concentrate, whichever it judges necessary, provided the plans for a plant have been submitted, either for concentrate or up to battery grade.
The reasoning behind all of it is a reading of other countries. Eric says the government has looked at economies that held large reserves before Zimbabwe did, Chile and Australia among them, and taken a lesson from what happened next. The stated mission is that Zimbabweans end up the ultimate beneficiaries of the lithium found there, which in practice means internalising as much of the chain as possible, from production through processing to battery grade, done locally.
Around that sit the incentives, which he lists rather than sells: tax incentives, rebates, rules on money remittances. All of it is published on government websites, plenty of it still needs fine tuning, and the association will compile the information for anyone who asks.
Most of the people buying lithium are not using it
The frustration he keeps returning to is who turns up with a cheque.
Eric estimates that 60% or 70% of the people who come to purchase lithium in Zimbabwe are not the end consumer. They are traders, and much of the time they are not even traders so much as speculators.
That has consequences at the other end of the chain. Small and medium scale miners, and some of the majors too, are having trouble exporting, and his explanation is that their main customers were traders rather than the people who actually consume the material. Meanwhile, at events like the one where this conversation was recorded, a conference in China hosted by Shanghai Metals Market, the room is full of manufacturers who genuinely need the product.
He calls the gap a disconnect, and he does not think the answer is more policy. What is missing is knowledge and information dissemination, more conversations of this kind and more direct connections between the people digging and the people consuming.
It is not a Zimbabwean condition either. He has always said, he notes, that the problems visible in Zimbabwe are the same in Nigeria, in Mozambique and in the DRC.
The 80% that does not show up in the coverage
The market on the ground breaks into two parts, and the smaller part is the one everybody writes about.
The majors are the big mining conglomerates, well documented, about 13 or 14 of them now with a fifteenth expected soon, and they hold the big mines. Then there are the miners, the small to medium scale operators. In percentage terms Eric puts the majors at around 20% of the market and the miners at 80%.
Which is the fact that makes the trader problem worse. Most of the available material sits with operators who are harder to find and harder to reach from an office in another country.
Shallow rock, and a seam that runs for hundreds of metres
Zimbabwe holds the sixth largest lithium reserves in the world and the largest in Africa. Fully exploited, Eric says, they could supply 20% of current business as usual demand worldwide.
The resource is hard rock rather than brine, which puts Zimbabwe closer to Australia than to Chile. The two common forms are spodumene and lepidolite, and the known occurrences run from east to west in what he describes as a U-shaped lithium belt.
Mining it is not the hard part. Most of the work being done now is open cast, and the attraction is that the deposits are shallow. Five to eight metres of digging reaches granitic bedrock, and just underneath it sits the lithium seam. Those seams can run for hundreds of metres and are usually five to eight metres wide, and the geometry is much the same for spodumene as for lepidolite.
His summary of the barrier to entry: two or three machines and you are good to go.
Processing is two or three players old
Under the old rules, exporting required a minimum of 3% quality, while most product ran between 1% and 2.8%. So very little processing was needed, and very little happened. The work on site was sorting, crushing and bagging.
Two or three players have now come online making concentrate, taking material from 4% up to 6% or 7%, and more are coming in behind them. The reason, on Eric's account, is that they have worked out what he has been saying about the shape of the market: there are a great many small scale producers to buy from.
The example he gives is a plant going up 60 or 70 kilometres from Harare, which will source from local miners within a 50 or 60 kilometre radius. All the operator has is the plant. The point of siting it there is that the surrounding miners get somewhere to sell, and help meeting their capacity. He is careful to say he does not know the specifications for that particular one.
His verdict on the wider conditions for anyone wanting to build one is short. The climate is very, very much favourable.
The call he keeps getting from New York
The investment case, as he puts it, is now waiting on one thing, which is a willingness from investors to actually come and stand on the ground.
Most of the calls he takes are from someone sitting in an office in New York, asking him about the lithium ban in Zimbabwe.
The association can host visitors, take them round the major mines and the better small and medium operations, and help them either identify a mine to invest in or find a location for a processing plant. Anyone is welcome to hop on a flight, and he says so more than once.
His answer to the New York question is that there is "no lithium ban in Zimbabwe". The caller says, well, I've read. And his reply to that is the one line that explains why the association exists at all: "I'm on the ground and I'm telling you."
This piece draws on the full conversation, which is available with a complete transcript on the episode page.