PROSPECT Lithium Zimbabwe (PLZ) says it has paid more than US$100 million in taxes to government since starting operations, but is calling for changes to the tax regime. The company argues that treating export taxes and levies as non-deductible expenses creates a double taxation burden for the lithium sector.
PLZ raised the concerns on Friday during a media tour organised by the Minerals Marketing Corporation of Zimbabwe (MMCZ), amid growing debate on how Zimbabwe can maximise revenue from lithium while promoting local processing and investment.
The company, which operates the Arcadia lithium project in Goromonzi, said the current tax framework does not allow the 10% export tax and 3% export levy to be deducted when calculating corporate income tax. This, it said, creates a cumulative tax burden.
"This accounting treatment creates a cumulative tax burden, driving the effective tax rate above 16% and leading to unintended double taxation," PLZ said in its presentation.
Keep up with the latest headlines on WhatsApp | LinkedIn
It urged the Ministry of Finance to make export taxes deductible for income tax purposes, saying the change would improve cash flow for exporters and boost the competitiveness of local industries.
"This adjustment will mitigate double taxation, improve exporter cash flows, and bolster the global competitiveness of local industries," the company added.
The appeal comes as Zimbabwe pushes miners to move beyond raw mineral exports and invest in local beneficiation -- a policy aimed at increasing domestic value addition, creating jobs, and retaining more mineral revenue in the economy.
Major investment and job creation
PLZ said its investment in Zimbabwe has reached US$700 million, making it one of the country's largest lithium investments. The company reported foreign currency earnings above US$305 million and corporate social responsibility spending of more than US$5 million.
It also said the project created more than 1,000 direct jobs and supports a further 1,000 indirect jobs.
Owned by Chinese mining group Zhejiang Huayou Cobalt, PLZ was the first company in Zimbabwe to produce lithium sulphate -- a key step in the country's push to process lithium locally instead of relying only on ore and concentrate exports.
The company is now moving toward lithium carbonate production, the next stage of processing used in the lithium-ion battery supply chain.
Lithium sulphate is an intermediate product that can be refined into lithium carbonate, a critical chemical for battery manufacturing. Developing this capacity is central to Zimbabwe's goal of capturing more value from its lithium deposits, which are among the largest in Africa.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Huayou's broader Zimbabwe operations also include Arcadia Technology Zimbabwe, an integrated lithium mining, beneficiation and smelting project with investment exceeding US$400 million, according to the presentation.
The project has a reported production capacity of 50,000 tonnes per annum, though the company did not specify the product. It was commissioned in 2025, a year ahead of schedule.
Combined foreign currency earnings from PLZ and Arcadia Technology Zimbabwe are projected to exceed US$600 million annually from 2026, the company said.
Huayou also reported an 85% wastewater recycling rate and said it had invested in community projects, including borehole drilling in Goromonzi, as well as support for education and other social initiatives.
Policy balancing act
The tax dispute highlights a wider policy challenge for Zimbabwe as it tries to balance revenue collection with the need to attract capital for mineral processing. While export taxes are designed to encourage domestic beneficiation, PLZ argues that their interaction with corporate income tax raises the cost of doing business.
The company said aligning Zimbabwe's treatment of export taxes with international best practice would support investment and improve the financial sustainability of processing operations.
Zimbabwe has prioritised beneficiation across the mining sector to retain more value from lithium and other strategic minerals. The move into lithium sulphate and potentially lithium carbonate production is part of that transition.
