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White Gold, Red Flags

Original Illustration by Jason Aragon '24

Lithium, sometimes referred to as “white gold,” is a necessary component of electric vehicle batteries and solar panels. Over the past three years, the clean energy transition has caused global demand for lithium to skyrocket. The metal is abundant in a handful of African nations, but foreign-backed companies still dominate mining. To reap the benefits of the burgeoning energy transition, resource-rich countries must facilitate non-exploitative mining models and prioritize local input.

The case of Zimbabwe reveals the relationship between a state, foreign companies, and resource extraction. Zimbabwe has the potential to meet 20 percent of the global demand for lithium. As of 2021, the mining sector accounts for 60 percent of Zimbabwe’s total exports and 11 percent of the nation’s GDP. Lithium mining offers immense opportunities to lift rural communities out of poverty. Yet, nearly all of the nation’s largest lithium mines are owned and operated by Chinese companies that, along with a small group of Zimbabwe’s political elite, retain most of the profits. This model of exploitation evokes a long history of resource extraction yielding devastation rather than economic advantages for communities on the African continent.

According to Tom Burgis, author of The Looting Machine, the key actors in mineral extraction may be different in postcolonial Africa, but the exploitative nature of foreign mine ownership persists. Gold mining was the impetus for the British colonization of Zimbabwe in 1898. China has now been involved in Zimbabwean mining operations for nearly 60 years. Between 2005 and 2020, Chinese companies generated an astonishing $10.45 billion in investments and contracts in Zimbabwe. More broadly, China  controls half of the world’s lithium mining capacity, making it  a prominent actor in transnational resource extraction. 

China’s dominance is devastating local economies and denying the country economic opportunity. 

First, new mines displace surrounding communities. Chinese companies have offered to compensate locals by buying land from them directly. However, forcible removal and land-grabbing are prevalent in Zimbabwe. Compensated or not, relocation uproots communities, removes people from ancestral lands, and prevents individuals from mining surface-level minerals on their own land. 

Second, Chinese mining companies, armed with substantial resources, crowd out local mining businesses and offer workers scant benefits and protections. These companies own the largest mines in the nation, exerting decisive control over lithium extraction and exportation. Director of the Centre for Natural Research Governance Farai Maguwu notes, “When we invest with [the] Chinese, and let them come in and do what Zimbabweans are capable of doing, we are building China, not Zimbabwe.” Further, Zimbabweans working in Chinese-owned mines have reported poor working conditions, low wages, and a lack of protective gear.

Third, Zimbabwe’s government openly displays a preference for “the Chinese over its own citizens,” according to Maguwu. Artisanal mining—small-scale, surface-level mining—directly supports the livelihoods of millions of people across Africa. Yet, the Zimbabwean government, after losing an estimated $1.8 billion in revenues from lithium smuggled by artisanal miners, imposed a ban on the export of raw lithium in 2020. Large mines that can process the metal on-site or have the capacity to build processing facilities were largely unharmed.

For Zimbabweans to gain from the country’s abundant valuable natural resources, local communities need to be consulted, and foreign companies should be held accountable.

A farmer in a small Zimbabwean town east of Harare, Sagacious Dangaranga, suggests manufacturing final products in Zimbabwe, which would create more local jobs. Zimbabwe “could have gained as a nation” if those with power had meaningfully consulted villagers like Dangaranga—companies might have realized value-add strategies, collective bargaining, and better environmental agreements. But private multinational companies are not typically driven by a desire to do  the ‘right thing.’

The potential loss of profits from community dissent is a larger concern. According to journalist Renard Sexton, China’s overseas mining endeavors alone have catalyzed social conflicts in over 50 developing countries. He calls it the “local resource curse” where exploitative mining can lead to social upheaval, undermining economic benefits gained from the sector.

In Zimbabwe, economic damages from outbursts of violence attributed to artisanal miners could motivate companies to work with host communities and consider local interests. Sexton identifies local resource governance—proactively amplifying community voices—as one of the few effective mechanisms to reduce conflict.

However, the risk of violence-related damages is simply not a strong enough motivator for transnational companies to suddenly switch course. In this effort, governments play a pivotal role in promoting citizen’s interests and requiring best practices. But in Zimbabwe, the government actively takes part in corrupt mining models. The state police force helps suppress violence in the gold mining industry and has been accused of arresting artisanal miners. As Maguwu points out, Zimbabwe’s government, rife with corruption, has “militarize[d]” mining. On top of the criticism it has drawn for corrupt practices, Zimbabwe has been presented with several policy options to reform its mining sector and distribute profits more equitably. It has been advised to fully legalize artisanal mining, introduce tariffs on metal exports, and construct more lithium-battery facilities in-country. 

In response to the West’s tendency to lecture African rulers on addressing corruption and retaining wealth from extractive industries, Burgis says “put your own house in order.” Host nation governments alone are not responsible for corruption and harm caused by foreign-owned mining companies.

While there are ongoing efforts in the international community to crack down on transnational mining companies (the UN Human Rights Council will likely pass a binding treaty on business and human rights), the culture also needs to change. Reducing state corruption and strengthening international regulations are essential to holding foreign companies to a higher standard, but the underlying issue is a long-continued culture of exploitation. Industry leaders and politicians in affluent nations must move beyond the neo-colonialist treatment of natural resource-abundant countries. As has been true in Zimbabwe, the continued colonial mindset leads to the devastation of livelihoods in host communities. The clean energy transition is an opportunity to account for the past hundred years of unequal benefits from natural resources. Yet, a just transition requires industries paramount in any level of the energy transition to stop replicating outdated, corrupt models. Reducing harm and increasing benefits for nations like Zimbabwe that are rich in transition minerals require effective local engagement. There must be better national and international accountability and enforcement systems to hold private companies accountable to listen to local needs. Above all, countries investing in foreign mining need to move beyond antiquated neo-colonial structures of resource extraction to facilitate an equitable energy transition.