Zimbabwe urged to renegotiate foreign mining deals

via Zim urged to renegotiate foreign mining deals | SW Radio Africa by Alex Bell on Monday, March 24, 2014

Zimbabwe’s government is being urged to renegotiate mining agreements it has made with some foreign investors, who have been accused of using the country’s political crisis to take advantage of its mineral wealth.

The Centre for Natural Resource Governance (CNRG) said in a recent report that “a plethora of bad decisions and corruption have ensured Zimbabwe’s mineral wealth is benefiting other countries at its own expense.” The CNRG took aim at countries forming the BRICS international grouping, which includes Zimbabwe’s top three investors, China, Russia and South Africa. Other BRICS members include India and Brazil.

CNRG executive director Farai Maguwu said Monday that the mining agreements with these countries were based purely on ‘political solidarity’ as a result of ‘isolation’ by Western nations. He said that the targeted restrictions imposed against the ZANU PF regime resulted in the party making ‘friends’ with nations like China and Russia, but not to the benefit of Zimbabweans.

“BRICS investments in Zimbabwe over the past decade have been often highly controversial and of little consequence to employment creation and revenue generation. BRICS nations make up Zimbabwe’s top three investors: China leads with investments of $374.8 million approved by Zimbabwe Investment Authority in 2013, followed by Russia with approvals from it worth US$40.1 million and thirdly, South Africa with US$39 million,” the CNRG report states.

Maguwu told SW Radio Africa: “We have seen an increase of extractivism in the country, and at the same time, a worsening level of poverty where the companies from these BRICS countries are extracting.”

This includes Russian firm DTZ-OZGEO (Private) Limited, a joint venture initiative between the Development Trust of Zimbabwe (DTZ) and a Russian company, Econedra Limited. This company is involved in gold mining in Penhalonga and diamond mining in Chimanimani, plus a number of other claims.

Maguwu said the firm’s operations are not only leading to serious environmental degradation, but there is also no sign that the wealth being mined will ever benefit local communities.

“The environmental catastrophe that is unfolding in Penhalonga is unprecedented in this province. And we don’t know where the gold is going,” Maguwu explained.

He said similar issues of non-transparency and bad practice are also evident at other BRICS country run mining ventures. This includes the Chinese run Anjin diamond mining firm in Marange, where millions of dollars in diamond remittances are still unaccounted for.

“Zimbabwe is losing out and if I was to make a recommendation, then government needs to stop these mining operations and renegotiate better plans,” Maguwu said.

He continued: “The government engaged these countries without a plan. It was more for political solidarity than engaging with them at business level. So these guys took advantage of the international isolation of Zimbabwe to negotiate terrible deals, which allowed them to loot the country at will.”

Maguwu said that reengagement efforts seen now by European and other western nations was an opportunity to ‘normalise’ relationships in the extractive sector, and negotiate deals that benefit Zimbabwe and its citizens first.