Glittering prizes from the war
A new mining consortium in partnership with Congo and Zimbabwe is to be launched on the London Stock Exchange
A new consortium to mine diamonds in war-torn Congo-Kinshasa, Oryx Diamonds, is to be launched on the London Stock Exchange on 13 June, in partnership with the government of Congo-K and Zimbabwe. The launch will be a major test of market sentiment, towards the British government's attempts to get buyers to shun ‘blood diamonds' - stones mined in countries in conflict such as Angola, Congo and Sierra Leone, On 22 May, Britains’ Minister of State for Foreign Affairs, Peter Hain, called for a consumer boycott of diamonds coming from war zones. London will be pushing the Group of Eight industrialised countries meeting in Tokyo in July to back an international scheme to outlaw 'blood' or 'conflict' diamonds. However, many diamond buyers' in London and Antwerp say the campaign against conflict diamonds won’t stop them buying rough diamonds from any source they choose. The proposed directors of Oryx Diamonds say they have no involvement with conflict diamonds and dispute that their diamond concessions in Congo are in a war zone.
If successful, the Oryx deal will give a financial lifeline to the beleaguered governments in Kinshasa and Harare in their military efforts against the three Ugndan-backed and Rwandan-backed rebel movements which currently control the east and north-west of Congo. It raises other security concerns as the mining concessions are all in Kasai-Oriental, south-west of the diamond capital, Mbuji-Mayi, and have been a target for the Rwdandan-backed Rassemblement Congolais pour la Democratie-Goma since, the outbreak of the Congo war in August 1998.
Arms for mines
The Oryx deal involves a profit-sharing arrangement with the private Zimbabwean company 0sleg (Operation Sovereign Legitimacy) of which Zimbabwe Defence Force Commander Lieutenant General Vitalis Musungwa Gava Zvinavashe is a director. According to its partnership agreement with Congo's Comiex (a private company linked to the Presidency in Kinshasa), Osleg has: 'the resources to protect and defend, support logistically,' and assist generally in the development of commercial ventures to explore, research, exploit and market the mineral, timber, and. other resources held by the state of the Democratic Republic of Congo.' Military sources in Zimbabwe regard Osleg as the economic wing , of the ZDF. It hires Ruisian-piloted Antonov aeroplanes, to move mining equipment to Kasais diamond fields. Rebel RCD forces claim these are the same Antonovs that are used to bomb their positions in eastern Congo.
President Laurent Desire Kabila's regime has been able to hold the Kasai diamond fields only because of military backing from Angolan and, most importantly Zimbabwen troops. Unable to pay cash for Harare's military help Kabila has offered mining concessions to several Zimbabwean private companies controlled by government ministers and military officers. So far, Zimbabwe’s commercial efforts in Congo have yielded little besides lucrative pickings for those officers running their own informal diamond mining operations in Congo's alluvial areas. The war continues to consume President Robert Mugabe's government's scarce resources: fuel shortages, mass redundancies, soaring inflation and interest rates in Zimbabwe are all blamed on the intervention in the Congo.
Oryx says its rights to exploit the diamond concessions granted by Kabila's embattled regime are worth over US $1 billion, although it calculates their real value at $208 million, after discounting exploration costs and political risk. Oryx gets 40 per cent of the profits from the operation; 40 per cent go to Zimbabwe's Osleg; and the remaining 20 per cent go to Cosleg (a joint venture between Osleg and Congo's Comiex). Cosleg, which describes itself as an asset management company, shows the high level of commercial coordination between the Mugabe and Kabila governments: it can award 'commercial development contracts, licenses and rights’. Through Comiex it gets preferential access to mineral, timber and other natural resources in Congo.
The political brains behind these deals are ZDF Commander Gen. Zviilavashe, Justice Minister Emmerson Dambudzo Mnangagwa and Defence Minister Moven Mahachi, They see Zimbabwe's intervention in Congo as a major opportunity to expand their country’s diplomatic and commercial reach. Yet so far, the operations haven't lived up to expectations. The ZDF, as provider of security against rebel attacks in Katanga and the Kasai provinces, plays a central role in their plans. Seeing China's People's Liberation Army (which backed the Zimbabwe African National Union during the anti-colonial war) as a model, Mnangagwa and Zvinavashe want the ZDF to have the commercial clout to match its military might.
Not only could the ZDF pay for its intervention in the Congo war, but, they believe, it could secure major contracts and revenues from mining operations in Katanga and Kasai. Zimbabwe’s own mining sector is in decline and has much spare industrial and processing capacity. So the marriage with Congo could, Harare believes, give Zimbabwe's declining economy a substantial boost in the medium term. Outside government circles in Harare there is much scepticism about these plans, partly because they are cloaked in so much secrecy; it is hard to see how the public exchequer, as opposed to private individuaIs, might benefit. Kabila and his Minister of State, Pierre-Victor Mpoyo, have been willing to hand over mineral concessions to the ZDF as a barter payment for its military help but the Zimbabwean military has lacked the finance and the technical skills to exploit such opportunities.
Enter an Omani businessman, Thamer bin Saeed al Shanfari, who is chairman of Oryx Natural Resources. An Oryx director said that Al Shanfari, a son of former oiI-minister Saeed bin Ahmed al Shanfari, had visited Harare 18 months ago on an Oman government trade mission. Because of his excellent English, AI Shanfari was seated next to President Mugabe and the two hit it off. Mugabe started to complain that his country lacked the finance and technical expertise to exploit all the Congo mining concessions that had been offered by Kabila's regime in return for Zimbabwe's military help. AI Shanfari agreed to look into the matter.
Oryx is born
An important midwife in the AI Shanfari-Mugabe axis was Oman’s honorary consul, Kamal Khalfan, who owns Zimbabwe's only local airline catering company, Catercraft. Khalfan's links to Mugabe and leaders of the ruling ZANU-Patriotic Front date back to the 1970s when he supplied their guerrilla force, the Zimbabwe African National Liberation Army, with military equipment. At the time, the Sultanate of Oman strongly supported the lan Smith regime and after Zimbabwean Independence in 1980, some of Smith's Rhodesian Special Forces officers joined the Omani Special Forces. Now AI Shanfari and Khalfan have become local celebrities in ruling party circles in Harare: they both have lavish homes just outside the city and are enthusiastic sponsors of Zimbabwe's prestigious horse race competition, the Republic Cup.
AI Shanfari's first big move in Zimbabwe was to form Oryx Zimcon, a joint venture with a Congo-Zimbabwe partnership. Oryx Zimcon is the technical partner (providing finance and mining expertise) to Cosleg, which provides the military muscle from the Zimbabwean troops and the mining concessions awarded by a presidential decree from Kabila. Oryx Zimcon's key target was to take over the substantial concessions south-west of Mbuji-Mayi, which were then being mined by the state owned Miniere de Bakwanga (Miba) in which Belgium's Sibeka has a 20 per cent stake. Senior Zimbabwean officials assured Oryx Zimcon that they would be able to persuade Kabila to transfer the concession rights from Miba to Oryx Zimcon. Meanwhile the ZDF built up its presence in Miba's concession, transporting earth-moving equipment in the Russian-chartered Antonovs.
Given the ZDF's key role in defending the Kasai diamond fields against rebel incursions, Kabila was inclined to listen to Zimbabwean officials' arguments to reassign a major concession from Miba to Oryx Zimcon. The arrangement nearly fell apart on 13 March this year when a Zimbabwean-registered plane was impounded by Congolese military intelligence officers at Kinshasa's Ndjili International Airport. The aircraft, carrying crates containing some $16 mn Congolese francs (worth about $500 mn on the parallel market), had been leased by AI Shanfari from John Bredenkamp's Breco group of companies to transport wages to Oryx's employees mining the Senga-Senga River diamond concessions, Oryx officials said. The Congolese military officers, including the director of Congo's Military Intelligence, were unimpressed by this explanation and appeared to have no knowledge of AI Shanfari's business relationship with Kabila's regime.
The Congolese soldiers arrested AI Shanfari's bodyguard and a British former Special Air Services officer, Roy Philpot, together with Bredenkamp’s pilot and a wealthy Asian businessman based in Kinshasa, Rasheed Patel, and his son Sajjid. Rasheedi was a big wheel in Kinshasa business circles: he did protocol jobs for the British Embassy and was country manager for South African Airways. He also worked for a Zimbabwean-based company which transported mining and military equipment in Congo-K. Rasheed remains in gaol in Kinshasa, while all the others connected with the incident were released within days of their detention.
AI Shanfari's other problem is the political row in Kasai, caused by Kabila's decree ordering the transfer of two of Miba's concessions - the kimberlite deposits at Tshibua and the alluvial deposits in the Senga-Senga River - to Oryx Zimcon. Kabila's Mines Minister, Frediric Kibassa Maliba, has ordered Miba to provide all the geological documentation on Tshibua and Senga-Senga.
Miba's board of directors and 6 000 employees, strongly oppose all this. The Tshibua and Senga-Senga projects - with potential to produce diamonds for decades to come - were Miba's future. The reassignment of these concessions has left Miba with a few concessions such as Disele, which has a life of no more than eight years. Even before the latest crisis, Miba was already in trouble. Its annual diamond production dropped from 6.8 mn carats in 1998 to less than 5 mn carats in 1999 and analysts expect a further fall to less then 4 mn carats this year.
Asset transfer in Kasai
In Kasai, the power base of long time opposition leader Etienne Tshisekedi wa Malumba, the transfer of Miba's concessions has been given a political interpretation: that Kabila, who comes from Katanga, is trying to marginalise the politically and financially independent Kasaiens by transferring ownership and control of their main economic asset to an unaccountable private consortium which relies on Zimbabwean troops for security. Kabila's standing in the Kasai provinces now appears to have hit rock bottom. This doesn't augur well for the loyalty of Kasaiens to Kabila’s regime, should they be called on to defend the region against the RCD. In 1997, when anti-Mobutu Sese Seko rebels were moving towards the province, Kasaiens welcomed the fighters, saying they shared their opposition to the late dictator. Mobutu lost control of Kasai-Occidental and Kasai-Oriental provinces within days and almost without any fighting.
Miba's Belgian partner Sibeka is reluctant to get involved publicly for fear of reprisals by the Kabila.regime. So is De Beers, which owns a 20 per cent stake in Sibeka, which has lost considerable commercial ground in Congo since Kabila came to power in May 1997. Privately, officials from both companies are dismissive of the Oryx Diamonds project. In the nature of commercial competition they are likely to be; as Sibeka and De Beers are the current losers in the power play for Kasai's diamonds. Their officials insist though that 'no condition is permanent' - especially in the turbulent politics of Congo.
None of this detracts from the outward confidence of AI Shanfari and his new business partner, South African-based Adonis Pouroulis, Chief Executive Officer of Petra Diamonds. Pouroulis says the two met in London earlier this year, and that Oryx is a cash-rich company that will allow Petra to expand. Until now Petra's main operation was its 29.5 per cent of the Nabera consortium, which manages the Akxkor diamond mine, owned by the Pretoria government. It has concessions in Botswana and Namibia which it has yet to explore and all its operations in Angola were halted by the war in the diamond fields there.
Blood diamonds
Oryx Diamonds is to be launched on London's Alternative lnvestment Market, (the second tier equities market of the London Stock Exchange), following a reverse takeover of the smaller Petra Diamonds by the bigger Oryx Natural Resources (whose shareholders will get 60 per cent of the equity in the new company, Oryx Diamonds). This is to follow a special general meeting of Petra shareholders in London on 12 June. Although they're expected to approve the reverse takeover of Petra, some key questions are being asked by market analysts about the detail. The main issues centre on Oryx Diamonds' business partners, Osleg and Cosleg, and their links to Zimbabwe's military. Linked to that are the political risks associated with the Congo war; the status of the project should the regime fall, a not improbable scenario, or the withdrawal of Zimbabwean troops, which provide much of the security for the concession area at present.
Under the Lusaka protocol signed last July, the signatories, including Ziimbabwe, pledged they would withdraw their troops. Now the United Nations is under growing pressure to deploy its military observer teams to speed implementation of Lusaka. The withdrawal of Zimbabwean troops from the concession area raises security questions, and might also cause the mercurial Kabila to revise his decision to offer preferential mining concessions to Zimbabwean joint-ventures, such as Oryx Zimcon.
Oryx Diamonds will also, have to do much persuading about the ethical issues concerning conflict or blood diamonds. Few would accept their argument that the diamond fields south-west of Mbuji-Mayi are not in a war zone. Similarly, their contention that they are working in an open and above-board manner with the legal government agencies does not sit easily with the shroud of secrecy surrounding their partner companies. The file on Oryx Zimcon is currently missing from Companies House in Harare. As AC went to press, this information was promised by Oryx Diamonds' lawyers in London. As AI Shanfari's vehicle, Oryx Natural Resources, is registered in the Cayman Islands, research on the company’s ownership and performance is more or less restricted to anecdotal evidence.
Much the same was said about the first big Congo-Zimbabwe mining joint venture run by Zimbabwean entrepreneur Billy Rautenbach, whose own companies were controlled by a complex web of entities in the British Virgin Islands and Jersey. Rautenbach was appointed Chairman and CEO of Congolese state-owned Gecamines and the rights of Gecamines’ prime mineral deposits from Gecamines Groupe Central were transferred to Ridgepointe and Central Mining Group, which were companies owned and controlled by Rauteribach and Congo's Mpoyo. That project ended in failure with the dismissal of Rautenbach from all executive positions at Gecmines and the collapse of his Central Mining Group and political problems between the Zimbabwean and Congolese officials involved. The question is, can AI Shanfari and Pouroulis learn from Rautenhach’s mistakes?
ON THE AIR!
PRESS RELEASE FROM CAPITAL RADIO
Capital Radio broadcast it’s test signal on FM 90.0 on Thursday 28th September at 23.00 in compliance with the Supreme Court order issued on the 22nd September 2000 by the full bench of the Supreme Court, the text of which follows:
A.
1. The monopoly on broadcasting services created by section 27 of the Broadcasting Act (Chapter 12:01) is inconsistent with s20(1) of the Constitution of Zimbabwe and is therefore invalid in so far as it vests in the Zimbabwe Broadcasting Corporation the exclusive privilege of carrying on a broadcasting service in Zimbabwe.
2. Sections 14 (1) and 14 (2) of the Radiocommunication Services Act (Chapter 12:04) are inconsistent with section 20 (1) of the Constitution of Zimbabwe and are therefore invalid in so far as those provisions prohibit any person, other than the Zimbabwe Broadcasting Corporation, from possessing or working a radio station for the purpose of carrying on a broadcasting service in Zimbabwe.
B. In the premises and for the sake of clarity, it follows that:
a. The Applicant (Capital Radio) is entitled under the law to operate and provide a broadcast service from within Zimbabwe.
b. The Applicant is entitled under the law to import into Zimbabwe all radio and other equipment to operate a commercial radio station and to broadcast within and outside Zimbabwe, subject to payment of all customs dues and import taxes lawfully levied in terms of the law, and to possess and utilise such broadcast equipment.
Contrary to the statements of the Minister of Information and Publicity in the President’s Office, Jonathan Moyo, at the time of broadcast no legislation existed to prevent this broadcast taking place, and Capital Radio has no intention of breaking the law. If Presidential Powers regulating broadcasting are brought into place, Capital Radio will comply with such regulations, as long as they are just and fair and within the bounds of the Constitution. Failing this, Capital Radio will be taking the case back to the Supreme Court to challenge the Presidential Powers.
Capital Radio is committed to bringing exciting alternative broadcasting services to the people of Zimbabwe.
From Capital Radio, 1 October
Top Broadcasters Join Capital Radio
Capital Radio, which began broadcasting on Thursday evening on 90 FM has employed some of the top names in the broadcasting industry.
Gerry Jackson, one of the founders of the station, has already been heard on Capital, giving the test signal. Jackson was fired from Radio 3 after encouraging listeners to phone in during the mass action in 1997. Known for her excellent rock programmes, Jackson has gathered an impressive team to bring listeners music, news and current affairs.
James Maridadi, another Radio 3 convert, recently hit the headlines for his one man demonstration against legislators drinking in Parliament. Maridadi has a great knowledge of local music and is much loved by the ‘Junior Three’s’.
Simon Parkinson, who for years was the cornerstone of the Radio Three Breakfast Show before re-locating to South Africa, will be returning to join Capital Radio. During his time with Radio Three, Parkinson was responsible for bringing in an enormous amount of advertising to the station.
Ish Mufandikwa, who is also a reporter and journalist for many international publications, has become well known for his reggae programmes and features on music from the Diaspora.
Georgina Godwin has been presenting the Good Morning show on Radio One for many years, and has gained huge popularity with her blend of talk and 60’s and 70’s music.
This is just the initial team of broadcasters, with many more expected to join soon. They will be supported by reporters, news gatherers and researchers, which will make Capital truly cutting edge Radio.