In an analysis,
the think tank warned despite blanket bans on the shipment of unprocessed
lithium to global markets, the mineral continues to slip into Asian economies
through clandestine routes, aided by collusion between mining firms and poorly
paid customs officers.
“Available
evidence points to collusion between miners, transporters, freight and shipping
agents and border officials,” Veritas said in its report.
“The miners
involved … 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,” the paper claimed.
“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.”
Veritas’
revelations, coming as Zimbabwe battles to position itself as a global player
in the green energy transition, underline the scale of economic haemorrhage
caused by porous borders and weak enforcement not only in Zimbabwe but across
the resource rich continent.
The Zimbabwe
National Chamber of Commerce estimates that smuggling costs the economy US$2,2
billion annually, wiping out about 18 000 jobs.
Lithium is only
part of a broader looting ecosystem threatening the country.
The India-based
Journal of Risk and Financial Management revealed on Friday that 23 shell companies registered in
Zimbabwe and South Africa laundered US$450 million through misinvoicing and
cryptocurrency layering – a new scourge undermining the region’s economies.
The findings
were based on a study which deployed an Artificial Intelligence (AI) system
called FALCON to mine 1,8 million transactions from the South African Financial Intelligence Centre, the Reserve
Bank of Zimbabwe and SWIFT.
It concluded that the South Africa–Zimbabwe
corridor alone is losing about US$3,1 billion a year to illicit financial
flows, much of it tied to mineral smuggling.
Veritas said
smugglers falsify shipping documents and bribe officials at exit points where
scanners are either absent or dysfunctional.
“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,”
Veritas added.
“Zimbabwe
continues to lose millions of dollars…despite the government imposing a ban on
the export of raw lithium in 2022.
“The ban, which
was imposed by SI 213 of 2022, 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. 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 was announced in a post-cabinet
press briefing by the Minister of Mines in June.
“These measures
are inadequate,” Veritas argued.
“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.”
Since the 2022
ban, authorities have insisted that all output be processed locally, but
currently there are no final refineries in the country. Yet smugglers have
continued to ship raw lithium, undermining the policy.
Between 2019
and 2024, smuggling accounted for nearly US$920 million in illicit proceeds,
according to the Financial Intelligence Unit.
When combined
with corruption, tax evasion and fraud, Zimbabwe may have lost US$6,15 billion
in five years — around 3,4% of its gross domestic product.
Economist Eddie
Cross said last week leakages from smuggling and under-declared imports were
crippling service delivery.
“The amount of
money involved is equal to the total budget for education,” Cross warned.
He said customs
and excise collections were “ridiculously low” despite ballooning imports of
fuel and vehicles, while as much as 80% of gold revenues were being
externalised.
“If we were
able to double expenditure on education or health, it would have a dramatic
impact on national well-being,” he said.
Cross added
unchecked illicit flows were a major reason why Zimbabwe remained stuck in slow
growth despite its vast mineral wealth.
Veritas urged
authorities to back technology with deterrent punishments.
“It recommended
stiffer sentences for smugglers, automatic withdrawal of mining licences for
convicted firms, better remuneration for border staff, and investment in
scanners and electronic tracking.
“Zero tolerance
to corruption” must shift from rhetoric to enforcement, the think tank said,
warning that without decisive action Zimbabwe’s minerals will continue to
enrich cartels and foreign corporations at the expense of its citizens.
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