Zim urged to renegotiate foreign mining deals

Mining in Zimbabwe

Mining deals in Zimbabwe need to be renegotiated according to the Centre for Natural Resource Governance

By Alex Bell
SW Radio Africa
24 March 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.

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3 Responsesto “Zim urged to renegotiate foreign mining deals”

  1. Chimbwido Warvet says:

    CNRG executive director Farai Maguwu should tell us how a better deal can be arrived at or is it the countries that are extracting precious metals in Zimbabwe that he is against? Magawu should put his cards on the table for the man in the street to understand what he is talking about. For instance can he explain in detail what he means by a better deal and how can he define it for us? It is of no use talking of a better deal without giving us his version or his blueprint/model of what a better deal looks like. The Warvet is not interested in political grandstanding he has often heard from Magawu but his model or blueprint that is superior to that provided by the Chinese, Russians and Brazilians. We can then make a comparison and Zimbabweans can then decide for themselves as to which model best serves their economic interests.

    • THE BALCK ARISTOCRAT says:

      Lol !!!! You naive fool !

      Since all the current mining deals have been secretly negotiated by the criminals running there Military Dictatorship for political and personal gain – only a total fool would believe that they would disclose these deals to allow a comparison.

      It is a well known fact that the Chinese only pay around 10 cents on the dollar for African natural resources. How do they get away with it? By dealing directly with the corrupt governments like Zanu PF.

      • Chimbwido Warvet says:

        My friend, let us be human and friendly for once. I am not opposed to the idea at all if this will bring about a meaningful change in the manner with which our precious metals are exploited by the Chinese, Russians and Brazilians businessmen. What Zimbabweans require is the model/blueprint from Farai Maguwu to enable them to make informed decisions.

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