The mining sector in Zimbabwe is characterized by its impressive diversity, housing nearly 40 different minerals. This sector plays a vital role, contributing approximately 12 percent of the nation’s gross domestic product (GDP). With the right measures in place, it has the potential to generate a staggering US$12 billion annually. Nonetheless, several challenges need addressing to realize this potential, including persistent power shortages, foreign currency deficits, and policy ambiguities.

Foreign currency retention requirements have been a longstanding issue for mineral exporters, particularly when unofficial exchange rates significantly deviated from the official rates. This situation, at times, encouraged smuggling. The government initially anticipated the mining sector to be a driving force behind economic growth, but the outbreak of the COVID-19 pandemic in 2020 presented unforeseen challenges.

Prominent minerals mined in Zimbabwe encompass gold, platinum, chrome, coal, and diamonds. The government has expressed its intent to revise the Mines and Minerals Act, making it more progressive and appealing to investors. The goal is to encourage increased investment in this sector.

Currently, companies are obligated to channel all mineral exports through the state-owned Minerals Marketing Corporation of Zimbabwe (MMCZ). A notable exception is gold, which is to be exclusively sold to the Reserve Bank of Zimbabwe (RBZ). Nevertheless, individual companies may, under government permission, directly sell minerals, bypassing the MMCZ. Notably, the MMCZ has faced targeted sanctions from the United States.

Key minerals in Zimbabwe’s mining landscape encompass gold, platinum, chrome, coal, diamonds, and lithium. In 2019, the government anticipated a 28 percent drop in gold exports from the previous year, falling from US$1.33 billion in 2018 to approximately US$946 million. Statistical data from the Reserve Bank of Zimbabwe (RBZ) revealed a 16 percent decrease in gold deliveries during this period, declining from 33.2 tons in 2018 to 27.6 tons in 2019. Among this total, small-scale miners contributed 17.4 tons, while primary producers contributed 10.2 tons. Several factors contributed to this decline, including suspected smuggling, fuel shortages, and the use of outdated technology.

The diamond sector underwent significant transformation as various diamond mining companies consolidated into the Zimbabwe Consolidated Diamond Company in Marange. This structural shift, alongside the adoption of conglomerate mining practices, is expected to attract increased investment and stimulate the purchase of advanced mining equipment. This consolidation prompted some international firms to exit the Zimbabwean diamond sector temporarily, although some were later invited to return.

A notable highlight is Zimbabwe’s position as home to Africa’s largest lithium deposits, making it a potential global leader in lithium exports. Given the growing international demand for lithium, especially within the energy-battery industry, Zimbabwe stands poised to significantly contribute to meeting this demand. The government aspires to satisfy up to 20 percent of the world’s total lithium demand once it fully exploits its substantial lithium resources.