ZIMBABWE’S domestic lithium miners said on Thursday several of their members had begun mothballing operations in response to a shock government directive forcing operators to halt exports of raw minerals.
Speaking exclusively to the Zimbabwe Independent, a member of the Lithium Association of Zimbabwe said cashflow problems had plagued local operators, mostly small-scale producers, since the blanket ban was enforced, sending shockwaves across the globe and briefly battering prices in China, the main market.
Hillary Vela, president of the association, did not disclose how many members had shut down, but said the crisis was particularly severe for poorly-capitalised local players, in contrast to Chinese multinationals.
The ban, designed to accelerate domestic beneficiation and curb mineral leakages, has instead unleashed a cascading crisis among indigenous operators, who were ill-prepared for its abrupt implementation.
“The directive caught miners off-guard and has jeopardised operations across the board,” Vela said.
“With exports halted, the ripple effects are being felt throughout the value chain. Small-scale miners have shut down, and local cashflows have been severely disrupted.”
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The implications would be dire in a country where mining remains one of the biggest sources of income.
Zimbabwe, the world’s seventh-largest lithium producer, has in recent years emerged as a critical supplier of the mineral that underpins electric vehicle batteries and energy storage technologies. The bulk of its output feeds into China, the world’s dominant processor of battery minerals.
However, the government’s hard pivot toward value addition — including a target to export only battery-grade lithium by 2027 — is now testing the resilience of an industry sharply divided between capital-rich multinationals and financially-constrained local miners.
While large-scale operators, many backed by Chinese capital, have begun investing heavily in processing facilities, small-scale miners say they lack the financial muscle to transition at the same pace.
“Setting up lithium processing infrastructure requires upwards of US$100 million,” Vela said. “This effectively forces smaller players into partnerships with major corporations if they are to survive.”
He spoke as, in a notable shift from its typically measured diplomatic tone, China issued a rare caution to its investors, flagging Zimbabwe’s policy volatility as a growing risk.
“The Government of Zimbabwe has recently suspended exports of raw minerals and lithium concentrates, and introduced new regulations,” the Chinese embassy in Harare said on Thursday.
It urged Chinese enterprises to “strengthen risk prevention” and conduct thorough assessments of Zimbabwe’s regulatory environment before committing capital.
The warning signals that the country’s policy unpredictability may be unsettling even its largest investment partners.
“Prior to making investments in Zimbabwe, investors shall conduct a comprehensive and in-depth assessment of the local business environment, industrial policies and relevant laws and regulations, fully consider various investment and operational risks, and make informed decisions so as to avoid losses resulting from government policy changes,” the embassy said.
“In the course of production and business operations in Zimbabwe, Chinese enterprises and nationals shall strictly abide by local laws and regulations, adopt proactive risk prevention and control measures, and protect their legitimate rights and interests through legal channels,” it added.
Chinese firms currently dominate Zimbabwe’s lithium landscape, with major stakes in operations such as Bikita Minerals, Arcadia Lithium, Sabi Star and Kamativi.
The export freeze has led to significant stockpiling of lithium concentrate across mining sites.
But industry officials were unable to quantify the growing inventory.
Authorities argue the ban is necessary to plug leakages and combat rampant smuggling, particularly along border points such as Forbes and Beitbridge. But for miners, the immediate consequence has been a liquidity crunch that threatens business continuity.
“The stockpiles are substantial, but unquantified,” Vela said. “At the same time, the halt has intensified financial pressures on operators.”
Industry stakeholders said they were locked in negotiations with government, pushing for a review of the ban and more realistic transition timelines.
Small-scale miners are lobbying for an extension of the two-year moratorium under Statutory Instrument 57 of 2023, which would allow continued exports of raw lithium ore to raise capital for processing investments.
Larger producers, meanwhile, are seeking concessions, including a reduction in foreign currency retention requirements and more flexible compliance timelines.
“The initial framework envisaged implementation by 2027,” Vela noted. “The sudden enforcement has created significant operational challenges.”
The policy shift is already reverberating beyond Zimbabwe’s borders.
Lithium carbonate futures on the Guangzhou Futures Exchange surged by 5,4% following the announcement a few weeks ago, reflecting concerns over tightening supply.