Zimbabwe’s ‘White Gold’

Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Coup leaders in Niger threaten to prosecute deposed president for treason, Ethiopia’s latest conflict hits its Amhara region, and Uganda looks for new lenders after the World Bank cuts loans.

The world’s clean-energy transition will be impossible without African minerals—and a degree of resource nationalism from African countries is benefiting China, which has for decades invested in the African green-energy market and accounts for 59 percent of the world’s lithium refining. Chinese companies run the majority of Zimbabwe’s mines and are better positioned to expand domestic processing there.

Lithium, often referred to as “white gold,” is essential to producing solar panels and the rechargeable batteries that power electric vehicles; and in 2022, demand pushed prices up by more than 100 percent. Africa could supply a fifth of the world’s lithium needs by 2030, but to best serve citizens, African leaders are demanding that miners go beyond extraction and add value by locally processing the raw mineral.

Last December, Zimbabwe, which has Africa’s largest lithium reserves, imposed a ban on raw lithium ore exports, requiring companies to set up  plants in the country and process ore into concentrates before export in order to boost local jobs and revenue. Those seeking to export and not process domestically would need to provide proof of exceptional circumstances and receive written permission to export raw lithium ore.

Zimbabwe’s ban, called the Base Minerals Export Control Act, will stop the country losing billions in mineral proceeds to foreign companies, officials said. Namibia has followed suit; and in 2020 around 42 percent of African nations, excluding those in North Africa, had implemented restrictions on raw exports, including the Democratic Republic of Congo, Ghana, and Nigeria.

Traditionally, “mining companies after extraction enjoy all the benefits [while] leaving communities in their catchment areas to bear the brunt of life-threatening dangers associated with their operations,” Edmond Kombat, research and finance director of Ghana’s Institute for Energy Security, told ESI Africa. “It is time to stop that practice.”

However, China, which controls the world’s critical minerals supply chain, is ideally placed to reap benefits in these situations, because several Chinese owned companies have recently completed processing plants in the country. Chinese-owned companies have spent more than $1 billion acquiring and developing lithium projects in Zimbabwe, which in contrast has seen very little Western investment.

Last month, Chinese minerals giant Zhejiang Huayou Cobalt opened  a $300 million lithium processing plant at its Arcadia mine in Zimbabwe, which it bought last year from Australia-based Prospect Resources for $422 million. The plant currently has the capacity to process around 450,000 metric tons of lithium concentrate annually. Under Zimbabwean law the refined lithium can then be exported for further processing into battery-grade lithium outside Zimbabwe.

In May, another Chinese company, Chengxin Lithium Group, commissioned a lithium concentrator to produce 300,000 metric tons per year at the Sabi Star mine in eastern Zimbabwe. And China’s Sinomine Resource Group said last month it had completed a $300 million lithium plant, after it bought Bikita Minerals, one of Africa’s oldest lithium mines, for $180 million.

Zimbabwe hopes to satisfy 20 percent of the world’s total lithium demand when it fully exploits its known lithium resources. “If we continue exporting raw lithium we will go nowhere,” Deputy Mines Minister Polite Kambamura told Bloomberg last year. “We want to see lithium batteries being developed in the country.”

New rules stipulate that a 5 percent royalty rate will be payable on lithium exported, due half in cash and half in processed final products so that the country can build cash reserves it could use for government-backed borrowing.

U.S. sanctions on Zimbabwe, imposed since 2001, have impacted the country’s access to borrowing and investment, leaving few options but China. Last year, Zimbabwean Finance and Economic Development Minister Mthuli Ncube claimed the country has lost more than $42 billion in revenue as a result of Western sanctions. The Zimbabwe Investment Development Agency reportedly received 160 lithium investment applications from investors based in China in the first half of 2023 compared to just five from the United States.

Even among Zimbabwe’s regional peers, U.S. companies have been left on the backfoot. Nigeria rejected Elon Musk’s Tesla in favor of Beijing-based Ming Xin Mineral Separation to build Nigeria’s first lithium processing plant in Kaduna state, in the country’s northwest region. Nigerian officials reportedly rejected Tesla’s proposal because it did not align with the country’s new policies. “Our new mining policy demands that you add some value to raw mineral ores, including lithium, before you export,” Ayodeji Adeyemi, special assistant to Nigeria’s mines and steel development minister, told Rest of World.

For decades, African economists complained that foreign companies extracted minerals without benefit to citizens. In 2015, Zimbabwean researchers estimated the country had lost $12 billion due to illegal trade involving multinational companies in China, Canada, the United States, and the United Kingdom—enough money to pay off Zimbabwe’s foreign debt.

Africa holds more than 40 percent of global reserves of key minerals for batteries and hydrogen technologies. Yet it’s predicted that, by 2030, more than 80 percent of the world’s poor will live in Africa, and about 75 percent of them in resource-rich countries.

It makes sense for African nations to step up efforts to increase quality jobs. “The United States and Europe must ensure that the partnerships they are building in Africa are mutually beneficial and non-extractive,” Theophile Pouget-Abadie and Rachel Rizzo recently wrote in Foreign Policy. “Otherwise, they will run headlong into the walls erected by an increasingly dominant Beijing.”

Washington in January signed a memorandum of understanding to help the Democratic Republic of Congo and Zambia develop an electric battery supply chain. But China is going beyond this in terms of thinking about what African nations need. Beijing, for example, with support from the United Nations Development Program, is facilitating a joint research center in Ethiopia to fast-track access to renewable energy in the country.

Experts warn that more African countries banning critical raw minerals exports will impede global decarbonization. Zimbabwe’s ban is perceived as unrealistic because the country lacks skilled workers. Some countries (Kenya, Tanzania, and Zambia) have implemented policies requiring mining companies to train locals, according to a recent World Bank report. The report suggests national export bans alone can make countries worse off because investors simply move their business elsewhere, but that training requirements could ensure retention of investment and the creation of a skilled workforce.

Thursday, Aug. 17: Southern African heads of state attend the 43rd Southern African Development Community Summit in Luanda, Angola.

Thursday, Aug. 17 to Friday, Aug. 18: Military officials from ECOWAS member states to meet in Accra, Ghana to discuss a possible intervention in Niger.

Tuesday, Aug. 22 to Thursday, Aug. 24: South Africa hosts the 15th BRICS Summit. Russian Foreign Minister Sergey Lavrov is expected to attend in place of Russian President Vladimir Putin.

Tuesday, Aug. 22 to Friday, Aug. 25: U.N. Climate Finance Workshop for ECOWAS member states held in Bonn, Germany.

Wednesday, Aug. 23: General election held in Zimbabwe.

Niger’s coup. Military leaders from regional bloc ECOWAS are to meet in Ghana’s capital Accra on Thursday and Friday to discuss a possible military intervention in Niger. The junta that seized power in a July 26 coup has said it will prosecute deposed President Mohamed Bazoum for high treason and undermining national security. A junta spokesperson said on state television that Bazoum was being charged for having communicated with foreign countries during his house arrest. Bazoum, who has been held in the basement of his palace since his ouster, could face the death penalty if convicted.

Coup leader and self-declared Nigerien President Gen. Abdourahmane Tchiani, previously head of the presidential guard, has appointed a 21-member cabinet in a show of defiance of a threat of military intervention by ECOWAS.

The bloc of West African nations, under the chairmanship of Nigerian President Bola Tinubu, has agreed to deploy a “standby” military force to restore constitutional order in Niger. The announcement came as Niger’s putschists on Sunday said they were open to dialogue but were incensed by the bloc’s ultimatum, according to a delegation of Muslim leaders from northern Nigeria that Tchiani received as part of mediation talks.

The prospect of a military intervention to reinstate Bazoum has heavily divided Nigerian senators, and it is unlikely ECOWAS will deploy an invading force soon. The 15-member bloc is currently down to 11 nations after the suspensions of Mali, Guinea, Burkina Faso, and now Niger for coups. Niger’s population is 98 percent Muslim— similar makeup to that of northern Nigeria. Talks between the junta and northern Nigeria’s Muslim leaders may hold the key to any successful negotiation.

Ethiopia’s Amhara conflict. Ethiopia’s military says it has recaptured six towns in its Amhara region after a week of fighting with the Fano militia. Fano backed federal troops in the two-year civil war in Ethiopia’s Tigray region, but the relationship has soured since the federal government announced in April that it would dismantle regional forces across the country to integrate them into the national army.

“Tensions have been brewing in Amhara for years,” Hone Mandefro, from the Amhara Association of America, a U.S.-based advocacy group, wrote in African Arguments. “Amhara grievances from the pre-Abiy period have worsened, and new, more profound concerns have emerged.” These include security concerns in the Amhara region and divisions in both Orthodox Christian and Muslim institutions.

Amhara nationalists, who were not part of the November 2022 peace deal regarding Tigray, say the disbanding of Amhara’s regional force undermines security in the region. They are concerned over the status of Western Tigray—a contested territory captured by Amhara forces during the Tigray war that Tigray also claims. In the neighboring Oromia region, Amhara communities are fleeing targeted attacks.

Uganda’s anti-LGBTQ laws. Ugandan President Yoweri Museveni has said his government will find alternative sources of funding after the World Bank halted new loans to Uganda over harsh new anti-LGBTQ laws that include the death penalty for “aggravated homosexuality.” The World Bank has so far disbursed $1.7 billion of the more than $4 billion allocated to Uganda.

Uganda’s government will ask Parliament to vote on a revised budget for July 2023 through June 2024 that reflects the potential financial impact of the World Bank’s suspension. In a statement, Museveni said Uganda would continue to hold talks with the World Bank but would also look to borrow from non-Bretton Woods sources.

“It is, therefore, unfortunate that the World Bank and other actors dare to want to coerce us into abandoning our faith, culture, principles and sovereignty, using money,” he wrote. “They really under-estimate all Africans.” Ugandan lawmakers, encouraged by U.S. evangelical groups, have amplified anti-gay rhetoric in the country.

Ethiopian officials have been lobbying for Japanese carmaker Toyota to resume plans to build a manufacturing plant in the country after a deal signed in 2020 was halted due to Ethiopia’s two-year-long civil war. But according to Ethiopian newspaper the Reporter, Toyota is seeking a contract ensuring that the government will purchase its vehicles before it sets up a manufacturing plant. “They asked for a long-term agreement in place to purchase Toyota vehicles before committing to a factory here,” State Minister Tarekegn Bululta told the Reporter.

Prior to the war, Ethiopia was on track to become Africa’s manufacturing powerhouse and enjoyed sustained economic growth. But it is currently struggling with dwindling foreign-exchange reserves and inflation at around 30 percent. In a bid to encourage foreign investment in an automotive industry that would create jobs, the government has banned the import of secondhand cars more than eight years old and lifted taxes on electric car purchases. Ethiopia’s manufacturing policies are mirroring those of Morocco, which in 2018 overtook South Africa as the biggest African exporter of passenger cars. Morocco has free-trade agreements and incentives in place with European manufacturers for factories in the country.

ECOWAS has a history of military interventions, having deployed forces to Liberia and Sierra Leone in the 1990s, and since then to the Ivory Coast, Guinea-Bissau, Mali, and Gambia. The juntas of Mali and Burkina Faso have warned they will defend Niger against regional intervention, which risks pitting the armies of West African coastal nations against their landlocked Francophone neighbors. So far only the Ivory Coast, Benin, Senegal, and Nigeria have said they would provide troops.

Senegal’s democratic slide. In just over six months, Senegalese will be heading to the polls. But government-imposed restrictions on social media and protests over the arrest of firebrand opposition politician Ousmane Sonko have escalated in recent weeks. Sonko, a former tax inspector, became popular among youth voters in 2016 when he exposed the use of offshore tax havens by foreign companies in Senegal.

Ope Adetayo noted in Coda Story that the use of internet shutdowns shows that Senegal, which has never experienced a coup, is losing its reputation as a bulwark of democracy. “Instead of curbing hate speech, shutting down the internet is a sign that [Senegal’s President Macky Sall] is prepared to use any means necessary to decimate the opposition before the elections in February,” Adetayo wrote.

Tunisia’s sinking economy. Tunisia, no longer a poster child of the Arab Spring uprisings, is in the midst of a deep financial crisis. The country is burdened with skyrocketing inflation, external debt, and a lack of economic opportunities for young people and businesses. In Inkyfada, Matteo Trabelsi and Rihem Neifar write that since Kais Saied’s government rejected an IMF deal, it is shirking all responsibility in attempting to tackle the impact of inflation on Tunisians. Due to a shortage in foreign currency reserves, basic imported commodities have seen significant price hikes. In July, the price of coffee increased by 30 percent, resulting in rationing at grocery stores.