Lithium Smuggling

Introduction

Zimbabwe continues to lose millions of dollars through the smuggling of raw lithium by some miners, despite the government imposing a ban on the export of raw lithium in 2022.  The ban, which was imposed by SI 213 of 2022 [link], was intended to push miners to process lithium domestically so that the country could earn more by exporting processed ore.  In 2023 the ban was extended to cover all other base minerals (i.e. minerals apart from precious metals and precious stones);  this was done by SI 5 of 2023 [link].

Some miners however have continued to export raw lithium by presenting false declarations at ports of exit, as unearthed by a recent Global Press Journal report [link].  See also a paper issued last year by the Africa Policy Research Institute [link].  In June this year, following a Cabinet meeting, the Minister of Mines and Mining Development announced a new policy under which the export of lithium concentrates would be banned from January 2027.  The new policy is outlined in a post-Cabinet press briefing of the 10th June [link].

These measures are inadequate, however, as they have not dealt decisively with smugglers.  Smuggling raw lithium remains a profitable activity because a lack of electronic scanning machines at the country’s borders makes it difficult to detect, and the smugglers who are detected are not severely punished.

Who is involved in the smuggling?

Available evidence points to collusion between miners, transporters, freight and shipping agents and border officials.  The miners involved are mostly Chinese, according to mining analysts – which is not surprising, because China controls about 90 per cent of Zimbabwe’s lithium mining sector.  The miners falsify documents of goods being shipped, and often customs officers and agents at the borders turn a blind eye and allow the shipments to pass through to their destination, principally China.  Customs officers are not well paid – most civil servants earn on average US$300 a month – so they are easy targets for bribes by companies that are seeking to make maximum profits.

What’s important about lithium?

Lithium has become a very important resource in the world, particularly during this era of energy transition forced by the need to protect the climate.  Most countries are moving towards green energy, the use of renewable sources of power such as hydropower, windmills and solar, and are moving away from vehicles powered by petroleum fuels in favour of electric vehicles.  Both electric vehicles and solar energy need batteries that are effective and efficient and can store energy for long periods.  Lithium is one of the materials used to manufacture batteries that meet these specifications.

What has to be done?

To safeguard Zimbabwe’s lithium reserves and get the most benefit from them, and to curb rampant smuggling, the Government should immediately consider the following measures:

  • Deterrent sentences and fines.  The laws on smuggling should be amended to reflect the severity of the cases of smuggling, particularly of mineral resources that should also fund social services.  Particularly heavy sentences should be imposed on officials who facilitate smuggling.
  • Withdrawal of mining licences.  Where mining companies are convicted of smuggling or falsifying information on export documents, their licences should be withdrawn.  This should be an almost automatic consequence of a smuggling conviction.
  • Improving border management and staff welfare.  The Government should fund the modernisation of border posts and install electronic scanners.  Officials who work at borders should be well remunerated to avoid their seeking bribes.
  • Compliance and enforcement of laws.  Generally, the Government should look at increasing compliance with the law by miners and should ensure that all laws are enforced strictly.

Conclusion

It is apparent that smuggling of lithium still continues at unacceptable levels in Zimbabwe.  It can be curbed if the Government changes its approach to dealing with corruption, illicit financial flows and strict enforcement of laws.  More than lip service must be paid to the mantra from above  – “zero tolerance to corruption”.  Corruption in all its forms must be stamped out completely.