Zimbabwe is actively considering using its abundant mineral resources to provide financing support for road and railway construction projects in cooperation with China through "resource-linked debt instruments," Finance Minister Ncube Mthuli disclosed on the sidelines of the World Economic Forum in Dalian. This model aims to use future revenue from natural resources as loan collateral to address the huge funding gap in infrastructure construction.
Ncube Mthuli said that Zimbabwe has held preliminary discussions with China Railway Group on such financing arrangements. He told reporters: "We have explored debt instruments linked to resources and hope to use these instruments in the future to support infrastructure development, especially in the road and railway sectors." According to the plan, the Zimbabwean side will assess project costs, toll revenue potential, and the payback period for the required resource investments to determine the specific scale of resource collateral and repayment path.
As Africa's largest lithium producer, Zimbabwe possesses rich mineral resources, but its infrastructure has lagged severely due to prolonged economic mismanagement and political instability. The African Development Bank estimates that the country requires approximately $34 billion to complete the modernization of its transport and logistics networks. The proposed resource-for-infrastructure scheme is similar in model to the $7 billion Sicomines copper-cobalt joint venture between the DRC and Chinese enterprises.
As early as September 2025, Zimbabwe's president had promoted a railway upgrade cooperation plan worth $533 million during a meeting with senior officials of China Railway Group in Beijing. The project is to be implemented by Chuantie International, a subsidiary of China Railway with extensive experience in Africa. The scope of works includes the repair and reinforcement of existing lines and bridges, modernization of signaling systems, procurement of 17 locomotives and 209 freight cars, construction of five new stations, and the key trunk line project connecting Beitbridge and Harare. This trunk line leads directly to South Africa and serves as an important strategic corridor for Zimbabwe's foreign trade. Currently, the project's financing method and the official signing date are still under final negotiation.
Zimbabwe's railway network was built during the colonial era and its annual freight volume once reached 12 million mt in the 1990s. However, decades of underinvestment, aging equipment, and foreign exchange shortages have caused the railway infrastructure to deteriorate continuously. Currently, annual freight volume has fallen to less than 3 million mt, representing only 15% of the historical peak. Many lines are overgrown with weeds, and a large number of locomotives and rolling stock are out of service, directly weakening the transport capacity for bulk commodities such as lithium, chrome ore, and coal to ports in Mozambique and South Africa. As a result, Chinese mining enterprises investing in Zimbabwe, such as Tsingshan Holding Group, Sinosteel Group, and Zhejiang Huayou Cobalt, are all facing bottlenecks in product shipments.
The decline of the railway system has shifted a large volume of freight to roads, leading to a surge in the number of heavy trucks, which in turn exacerbates road congestion, traffic accidents, and pavement damage, creating a vicious cycle. To address this, the National Railways of Zimbabwe has incorporated this railway upgrade into a broader modernization framework and collaborated with 11 private enterprises. Among them, South Africa's Grindrod, through its subsidiary Beitbridge-Bulawayo Railway, has deployed 3 locomotives and 150 wagons to relieve current transport pressure. Meanwhile, the Zimbabwean side is also exploring cooperation with the University of Zimbabwe, leveraging the university's innovation center for localized railway technology R&D and talent cultivation to build capacity for long-term operations.
Analysts point out that if this railway upgrade is successfully implemented, it will not only fully restore Zimbabwe's decaying railway network but also provide critical logistical support for the country to achieve its $12 billion mining target. It will also further deepen the strategic positioning of Chinese-funded enterprises in Zimbabwe's mining and infrastructure sectors.
According to market dynamics, in recent years, especially this year, lithium ore arrivals from Zimbabwe have been continuously hampered, with insufficient inland transport capacity being one of the major bottlenecks constraining the smooth arrival of goods. With the implementation of the relevant logistics system upgrades, this situation is expected to be effectively alleviated, significantly improving the transport efficiency of lithium materials, thereby injecting solid strength into stabilizing the global supply of lithium resources.
Source: Mining, compiled by SMM.
