ourEconomy: News

Why is a company accused of looting diamonds back in Zimbabwe’s mines?

A Chinese-Zimbabwean military venture has been handed one of the country’s most lucrative diamond-producing blocks, despite past problems

Kudzai Chimhangwa
28 May 2021, 12.01am
In 2006, major diamond discoveries were made in Marange, in the east of Zimbabwe
Suraj Dongol / Alamy Stock Photo

In 2016, Robert Mugabe, then the president of Zimbabwe, announced that a mining company had looted diamonds worth $15bn from the country. The company was Anjin, a joint venture between a Chinese firm and the Zimbabwean military.

Anjin strongly denied the allegations. But considering the dire state of the country at the time – a collapsed healthcare system, chronic fuel and food shortages, dilapidated roads – the claims were explosive.

Yet in January this year, the state-owned Zimbabwe Consolidated Diamond Company pulled out of the most lucrative diamond-producing block in the east of the country and handed it over to the very same company: Anjin.

Diamonds from Zimbabwe have Kimberley Process certification, which means they are supposed to be traceable. However, in recent months critical questions about accountability and transparency in the country’s diamond-mining sector have resurfaced.

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Chinese investment in Zimbabwe

In 2000, under Mugabe’s rule, Zimbabwe embarked on a chaotic land reform programme, which saw the displacement of 4,500 white commercial farmers from prime land.

According to the government, this exercise was meant to redress colonial land imbalances. Almost immediately, the West imposed sanctions on Mugabe’s administration, which in turn sought increased cooperation with China in a foreign policy dubbed ‘Look East’.

In 2006, major diamond discoveries were made in Marange in the east of the country. A diamond rush swiftly ensued, leading to a brutal clampdown on informal miners by the military in 2008, in which an estimated 200 people were killed.

Two years later, the government granted Anjin a licence to mine diamonds in Marange. The company remained in the area until it was evicted by Mugabe in 2016, along with several other mining companies. Anjin is a joint venture between Chinese company Anhui Foreign Economic Construction Group (AFECC) and the Zimbabwean military through its investment vehicle, Matt Bronze.

Many fear that the return of Anjin is a sign that Chinese foreign policy is becoming increasingly dominant in Zimbabwe

In 2016, local media reported that Anjin had smuggled diamonds worth $200m to China, a claim that Anjin denied, saying that the company – legally – exported only $112m worth of the lucrative mineral.

When Mugabe’s administration expelled Anjin, it set up the wholly state-owned Zimbabwe Consolidated Diamond Company (ZCDC), which took over mining operations in the area. Anjin challenged its eviction through the courts, but lost all cases.

At the start of this year, the ZCDC ceased operations in a diamond-rich domain called Portal B and handed the site to Anjin. The ZCDC had previously estimated it would earn $12bn from diamond sales by 2023 – a sum that could transform Zimbabwe’s economy.

Experts say that giving Anjin a lucrative mining block undermines public investment in the diamond sector. The ZCDC is reportedly on the brink of collapse as workers have left the company in protest over the transfer of the most lucrative mining area to Anjin.

Many fear that the return of Anjin to the Marange diamond fields is a sign that Chinese foreign policy is becoming increasingly dominant in Zimbabwe’s political and economic affairs.

Rot ‘writ large’

In an interview with openDemocracy, the director of Zimbabwe-based resource watchdog Centre for Natural Resource Governance, Farai Maguwu, claimed that the lucrative concession to Anjin only confirms that the company is linked to powerful individuals in the Zimbabwean government who are in partnership with AFECC.

“Although Zimbabwean diamonds have been declared conflict-free, a significant amount of minerals are being shipped to China via Beira in Mozambique to avoid strict aviation checks,” he said.

Anjin did not respond when asked to comment on these allegations.

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Anjin has also been accused of flouting procedures by selling diamonds without the involvement of the Minerals Marketing Corporation of Zimbabwe (MMCZ). The MMCZ is the country’s exclusive agent charged with selling and marketing all minerals in the country, except gold.

The company has resisted having its books audited by the government’s auditor-general ever since it began mining during the Mugabe era.

Anjin management recently told a local publication that the company’s operations were above board, claiming that its monthly production returns have been filed with the Ministry of Mines ever since the company resumed operations. No comment was made about mining activity carried out in the past, however.

Human rights watchdog Global Witness argues that Zimbabwe’s security forces have played a key role in silencing dissent over the years, particularly during political processes, and the risk is that diamond mining proceeds could have funded such abuses. The current lack of transparency about diamond mining revenues in Marange foreshadows difficult times in the presidential and parliamentary elections due in 2023.

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