ourEconomy

Will Zimbabwe’s diamonds be forever? A glimpse into a nation’s resource rich curse

Murky deals with Russian and Chinese firms mean super-exploitation in Zimbabwe's communities and super-profits for people thousands of miles away.

Kudzai Chimhangwa
10 April 2020
Image: Kim Alaniz, CC by 2.0

Alvin Moyo wipes droplets of sweat off his brow as the sun's seething heat seems to add to his burdens. He feels his heart skipping a beat regularly as he listens intensely for any unusual sound that may signal the arrival of soldiers and dogs patrolling the diamond rich fields of Marange. He lies prostrate on the dry soil, with a dirty brown sack firmly tucked under his sweaty armpit, and prepares to dash across the field, so he can scoop mounds of gravel that might contain diamonds. Should he be spotted, he risks being gunned down by overzealous soldiers, working under orders to protect the fields. Just like the thousands of unemployed Zimbabweans seeking out precious stones in the area, he goes for it.

The Marange concession, located in the east of Zimbabwe, is home to one of the world's richest diamond deposits. Ironically, since the official discovery of diamonds in 2006, the Marange community has become poorer due to its forced isolation from the rest of the country. Civil society groups charge that this community is currently one of the world’s most militarized mining regions with hundreds of armed soldiers and police stationed at various bases and check points. Residents of Marange allege psychological trauma, physical abuse by soldiers, and lost freedom after their homelands were declared protected areas by the government.

Visitors to the Marange community are required to obtain a police clearance which is often denied. A horrendous and brutal massacre of what government labelled illegal miners ensued in 2008 when the military was deployed to clear the fields of some 30 000 people purportedly to restore order and regularize mining activities.

Two years later, the Zimbabwe Defense Forces entered into a partnership with a Chinese concern, the Anhui Foreign Economic Construction Group (AFECC) to form Anjin. The agreement to form a joint venture was signed by Brigadier-General Charles Tarumbwa on behalf a military company called Matt Bronze (Pvt) Ltd and Peng Zheng on behalf of Anhui. More companies joined the diamond rush, among them Mbada Diamonds, Chinese company Jinan Investments, Marange Resources, Gye Nyame, Kusena and Diamond Mining Corporation.

However, when all these companies, including Anjin, were booted out of Marange in 2016 by former President Robert Mugabe, who accused Anjin of spearheading the massive looting of billions of dollars' worth of diamonds, this move did not go down well with Beijing. It came as no surprise when Anjin Investment's mining license was renewed soon after Mugabe's ouster by a military coup in 2017. "Anjin was brought back because of an agreement with the Chinese government. We had to bring them back for public relations reasons," Deputy Mines Minister Polite Kambamura told the media last year.

Centre for Natural Resource Governance Director Farai Maguwu dismissed any claims that diamond deposits could be running out in Marange.

“There is no evidence to suggest diamonds have depleted in Marange. In the case of Jinan, it’s all about the block they were mining, it wasn’t really profitable. Jinan was one of the last companies to enter Marange and by then, most lucrative sites had been grabbed. As for the other companies like Mbada Diamonds and Anjin, the fact that they went to court protesting the government decision to force them out of Marange in 2016 is clear evidence there was still much to fight for in Marange,” Maguwu told me.

“Anjin went on to negotiate with President (Emmerson) Mnangagwa after Mugabe was deposed and they resumed operations on 1 March 2019. Anjin sneaked back into Marange without any public knowledge or parliamentary oversight on how they were brought back. Government officials in the Ministry of Mines and Mining Development professed ignorance on the matter, pointing to the military. The claims that diamonds had been seriously depleted were meant to divert public attention from Marange and ensure looting goes on undetected,” he said.

“The deals are shrouded in secrecy because they are corrupt deals, benefiting a few political, military and security elites. So terrible are the agreements that they can’t be revealed to the public,” said Maguwu, adding that Anjin never remitted anything to government over the years, lending credence to claims that proceeds from its mining activities were funding a parallel government.

Far from the madding crowd

The Extractive Industry Transparency Initiative (EITI) is an international organization which advocates for global standards for transparency and accountability in the mining sector. The Zimbabwean government vehemently refused to join the initiative earlier this year.

So tense was this matter that Finance Minister Mthuli Ncube reportedly had a fall out with his cabinet colleagues over his plan to push government into joining the initiative. Officials argued that the initiative is a Western-sponsored ploy to spy on the country and exploit its resources. Another reason cited by cabinet for blocking moves to join EITI was that it would be used by powerful Western nations to interfere in deals that Mnangagwa’s government enters with countries like China and Russia as part of the global trade war.

In an interview, economic analyst Victor Bhoroma said that the diamond mining industry in Zimbabwe could be worth plus or minus US$ 1 billion per year, with a capacity to produce 5 to 10 million carats of the precious stone annually.

“The key requirement for diamond mining in Zimbabwe was to join and implement the EITI and work with the Kimberly mining process right from the start so as to ensure global standards in the awarding of licences, reporting, mining and marketing of diamonds on the world market at competitive prices,” he said in an interview.

“The diamond mining sector in Zimbabwe was complicated by the involvement of the armed forces and politically connected miners which made transparency a key challenge. This was the result of state-army conflation which ordinarily would be fixed through enacting strong and independent institutions,” said Bhoroma.

Enter The Kremlin

In January 2019, as Zimbabwe was burning from serious clashes between protesters and security forces over fuel price hikes, Mnangagwa met with Russian President Vladimir Putin in Moscow, where business agreements were signed.

The Kremlin-controlled diamond mining concern, Alrosa, was immediately granted a concession in Marange but nothing much could be scrutinized under this deal. It is only known from media reports that Alrosa owns 70% of Alrosa (Zimbabwe) Limited JV while the state-owned Zimbabwe Consolidated Diamond Company owns 30%.

The entry of Russia’s mining giant Alrosa follows the same script that Zimbabwe has used to identify investors for Marange – secrecy. There was never any consultation with other stakeholders, especially the Marange community and civil society. History shows that mining deals that are negotiated in secrecy are corrupt, and only benefit the political and military elites, deals that are in essence prejudicial to the economic interests of the country.

The implications of Mnangagwa's Look East foreign policy are far-reaching, more so after his ‘Zimbabwe is Open for Business' mantra was spurned by the West.

While the agreements seek to save Harare from its current economic crisis, they come at a time when Russia plans to reinforce its footprint in Africa to withstand competition from China and the USA. Russia’s state-owned petroleum and gas company Tatneft is already eyeing Zimbabwe’s diamonds in a secret fuel-for-gems deal.

An independent paper reported that crisis-hit Zimbabwe was on the verge of replacing its antiquated military helicopters with Russian-made fighter jets in yet another murky deal that would see Harare mortgaging part of its enormous mineral portfolio, including diamonds to Moscow.

More global attention on diamonds from Marange shall be drawn for all the wrong reasons. There are growing fears from civil society that off-budget financing arrangements for Zimbabwe's military will accrue from such secret deals. Such funding will inevitably be used to entrench the current repressive political system through a well-oiled military. Besides straining relations between Zimbabwe and the West, these murky transactions will set a bad precedent for the Southern African Development Community region as to the 'predatory' investment model which Russia and China will use in Africa.

A gloomy dusk…

Roads to Marange are impassable. The local clinic is a death trap with no medicine. Little school children walk up to 10 Kilometers to and from school daily. The displaced villagers are experiencing new poverty with no safe drinking water, and no sources of livelihood.

Rough diamond mining continues to be the epitome of the ‘paradox of plenty’ to the producing nations, particularly communities affected by mining.

The Center for Natural Resource Governance contends that by presiding over the siphoning of wealth from poor communities whilst further enriching the rich, the Kimberley Process is promoting uneven development where super exploitation of one region or country leads to super profits for people thousands of miles away. This unevenness is perfectly on display in Zimbabwe’s Marange community.

With Anjin Investments' and Alrosa's interests in Marange secured, it’s all smiles to the bank for Zimbabwe’s military and the firms concerned. For young people like Alvin and thousands others, it's a matter of struggling to make a living and dodging live fire from well-trained soldiers.

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