Zimbabwe Uses Lithium to Fund China Infrastructure Deal
Zimbabwe is exploring mineral-backed loans with China to fund road and railway construction, with finance minister Mthuli Ncube opening talks with China Railway during the World Economic Forum in Dalian.
Under the potential deal being discussed, Zimbabwe would pledge future revenue from natural resources against loans tied to specific infrastructure projects. Mthuli said the government needs to decide which roads to prioritise, what they will cost, and how much of the repayment can be covered by toll fees before it commits to a deal.
The African Development Bank estimates Zimbabwe needs around US$34bn to modernise its logistics networks, due to years of economic mismanagement that have left roads and railways in a poor state.
Zimbabwe is Africa's biggest lithium producer and its rail network is critical for getting ore to ports for export. China has invested heavily into mining in Zimbabwe, so it has a vested interest in improving the transport infrastructure.
The country is also preparing to ban exports of raw lithium concentrate from January 2027, forcing Chinese mining operators to process more material inside Zimbabwe.
Resource-backed financing
Zimbabwe's proposal mirrors the deal struck in 2008 between the Democratic Republic of Congo (DRC) and Chinese companies to improve transport links for the Sicomines copper and cobalt mine. Both sides agreed to US$7bn of investment to be funded through mining revenues.
The arrangement suits both sides because Zimbabwe gets infrastructure it cannot afford to build, while China secures access to minerals it needs for its electric vehicle (EV) battery supply chain.
Speaking at the World Economic Forum in Dalian, Mthuli says: "We spoke to them about resource-linked debt instruments that we want to explore going forward to support our infrastructure development, especially roads and rail."
The danger for Zimbabwe is that the deal could heavily favour China, which is what has happened in the DRC. According to the DRC's Inspectorate General of Finances, only US$822m has been spent on infrastructure since the Sicomines deal was signed, compared to nearly $10bn in profits generated for Chinese investors.
Lithium export ban
Zimbabwe has vowed to press ahead with a ban on the export of raw lithium concentrate from January 2027, with Mthuli confirming the deadline will not be delayed at the World Economic Forum.
Chinese firms have invested more than US$2bn in Zimbabwe's lithium sector since 2021, giving Beijing huge influence over a supply chain that supports its domestic EV battery production, but Zimbabwe wants to keep the processing stage on home soil.
The Zimbabwe government points to two processing plants as assurance that domestic capacity exists, both of them Chinese-owned. Zhejiang Huayou Cobalt has built a lithium sulphate plant in the country, while Sinomine is developing processing infrastructure at its Bikita mine.
The export ban puts Zimbabwe in a stronger position but is also risky, because if processing capacity falls short of what the Chinese mines produce, it would cause expensive bottlenecks.
Western interest and resource nationalism
Mozambique introduced laws in 2026 requiring 15% state ownership in all mining ventures, and the DRC has imposed cobalt export quotas alongside Zimbabwe, which is pressing ahead with its own lithium export ban. All three countries hold large reserves of minerals critical to electric vehicle production and have moved to tighten control over how those minerals leave their borders.
African nations are sitting on minerals that are worth exponentially more once processed, and governments are no longer willing to let countries remove them and create the value elsewhere.
Chinese firms have invested heavily across Africa's critical minerals sector over the past two decades, building relationships with governments and securing supply agreements. Western operators have been slower to do the same, and are now competing for access in a more restrictive environment.
How Zimbabwe's negotiations develop will be watched closely by other mineral-rich African nations considering similar moves. The trend across the continent is towards tighter terms, and Zimbabwe's lithium ban is one of the toughest moves yet.
