PARTNERSHIP AFRICA CANADA REPORT:
DIAMONDS AND CLUBS
The Militarised Control of Diamonds and Power in Zimbabwe
June 2010
The Political Economy of Mugabe’s kleptocracy
What is playing out in the diamond concessions of Marange and River Ranch is an all too familiar Zimbabwean story.
Each time President Mugabe and his inner circle have faced a crisis of political legitimacy they have resorted to carefully crafted campaigns of economic theft with which to engage in crass patrimonalism to placate key constituencies and buy more time in office. As such, the involvement of ZANU elites in the country’s diamond resources is the latest chapter in a long continuum by which the violent expropriation and manipulation of economic resources have been used for their political and economic gain.
It is a continuum manifested previously by three key events: Zimbabwe’s plunder of the Democratic Republic of Congo, the orchestrated invasion and seizure of white-owned farms, and the manipulation of foreign exchange rates during recent years of hyper-inflation. An examination of these events shows not only a similarity of tactics, but also the same personalities orchestrating and benefiting from such schemes.
These individuals, who have perfected their illicit behaviour to a niche specialty, are the same principals now battling for control of Zimbabwe’s diamonds, ZANU, and the country as a whole.
The public faces of this power struggle are ostensibly the Minister of Defence Emmerson Mnangagwa and his long time political foe, General Solomon Mujuru, the retired head of the armed forces and one of Zimbabwe’s richest men. Mujuru is also the husband to First Vice President Joice Mujuru, who at times is considered an equal partner in his presidential aspiration, but remains in the shadows so as not to cause offence to President Mugabe14.
While both men have long considered themselves the dauphin to President Mugabe, the true power brokers of Zimbabwean politics are members of the Joint Operations Command (JOC).
The members of the JOC are the high priests of Zimbabwean politics, the final arbiters of tough decisions15, and the architects of every single government-sponsored act of repression from the 1985 Gukurahundi massacres in Matabeleland, to the farm invasions, to successive episodes of election-related violence.
The JOC is the ultimate Praetorian Guard, its tentacles control every facet of state security. It is an organization driven by two simple concerns: safeguard Mugabe’s place as president, and neutralize any potential legal or political threats to their power. The JOC will likely decide who succeeds Mugabe.
At first glance it would appear Mnangagwa has the inside track to win their support, as he doubles as chair of the eight-person group16. He is also considered more of a hardliner and closer to most “securocrats” including Defence Force Commander General Constantine Chiwenga, perhaps the most influential of all JOC members.17 In 2007 Mnangagwa won the president’s personal favour after Mujuru’s aspirations got the better of him by openly campaigning within ZANU to replace Mugabe, whom many thought would not contest the 2008 election.
Despite this misstep, Mujuru is well known within the JOC and wider military circles from his past role as head of the military and, through his wife, controls some formidable levers of power in his own right. Among them is ZANU’s Politburo, the most powerful party organ and widely considered a more influential decision-making body than the cabinet. The Mujuru’s strategy is to consolidate their control of internal ZANU structures, build behind-the-scenes alliances with the MDC, and present themselves as the compromise candidate(s) once Mugabe dies.18 There are rumours that some western governments
have given their tacit approval to such a scenario.
While the succession issue is far from settled between these two camps, both Mujuru and Mnangagwa are intimately involved with efforts by the JOC to monopolize the country’s diamond resources —just as they have been with all previous economic self-enrichment schemes on which the JOC has embarked.
River Ranch: Solomon’s Mine
River Ranch is known colloquially as “Mujuru’s mine.” There is even paperwork to prove it.1 Which in the tussle for control of Zimbabwean diamonds is a rarity. The corporate ownership and shareholder structure of Mbada and Canadile, by comparison, remain largely cloaked in mystery — despite the public scrutiny and best efforts of Zimbabwe’s Parliamentary Committee on Mines and Energy.
But while Mujuru’s ownership may be common knowledge, many other things about River Ranch remain in the shadows. The reason: the mine goes to the very heart of Mujuru’s struggle for control of ZANU, and allegations it is being used to launder some of the plunder he and his allies secured in DRC.
In April 2004 Mujuru controversially grabbed the mine with the help of Adel Abdul Rahman al Aujan, a billionaire Saudi real estate developer who also owns luxury beach resorts and safari camps in Eastern and Southern Africa that operate under the name Rani Resorts.
At the time River Ranch Mine was owned and managed by Bubye Minerals which took possession of the once insolvent mine in September 1998. The proprietors of Bubye Minerals are Adele and Michael Farquhar, who managed to turn things around so the mine was producing an average of 30,000 carats per month.
The Farquhars’ misfortune began after they gave Aujan a 30 percent stake in the company in 2002 after they ran into some financial difficulties caused by a cyclone.
By 2004 the two parties had a falling out, and Aujan abruptly called in his loans. Shortly afterwards he convened a meeting at the exclusive Meikles Hotel in Harare, unilaterally reconstituted the company as River Ranch Limited and appointed Mujuru and Trivanhu Mudariki, another senior ZANU politician, as directors.
Days later the Farquhars were escorted off the property by police at gunpoint. The case has been before the courts ever since, with several legal judgments upholding the Farquhar’s legal rights. Despite this, River Ranch Limited continues to occupy and mine despite a lack of clear title.
River Ranch is as illustrative of Mujuru’s disdain for the rule of law, as his abilities to flex his political muscle to get his way. On several occasions he has secured interventions very few other Zimbabweans could.
The first came in November 2005 when then Minister of Mines Amos Midzi issued a letter “correcting an administrative error” in a bid to overturn a court decision that had upheld legal title to the Farquhars.
This effort ultimately failed, but it showed the ease with which Mujuru could give marching orders to a minister’s office.
Other interventions were more successful. In Zimbabwe it is the Minerals Marketing Corporation of Zimbabwe, a parastatal within the Ministry of Mines, which issues Kimberly Process certificates needed for the legal export of rough diamonds.
Despite controlling the mine, Mujuru was initially prevented from legally selling any diamonds, thanks to an injunction won by the Farquhar’s legal team. Undeterred Mujuru repeatedly pressured Priscilla Mupfunira, the chairwoman of the MMCZ, to issue the certificates anyway. She refused.
Mujuru turned to the Central Committee, the second most powerful ZANU organ whose main duties include dispensing patronage. The Committee is firmly controlled by Mujuru’s wife, Joice, and includes Mudariki among its members.
In late 2008 Mupfunira and most of the MMCZ board were abruptly replaced. (Retired Lt-Col) Nelly Abu Basutu assumed the top job. She came with impeccable connections: her husband is Air Vice-Marshal Titus Abu Basutu, the deputy to Air Force Chief Perence Shiri.
Mujuru has also controversially obtained technical assistance — after the takeover — from the African Management Service Company, a joint entity managed by the United Nations Development Programme and the World Bank’s International Finance Corporation.
There are also persistent questions surrounding the company’s “official” production numbers. Although there is no definitive proof Mujuru is laundering Congolese diamonds, RRL’s numbers don’t tally.
Consider the following: River Ranch Limited did not publicly declare its production from 2004 to 2008. The first public declaration was made by Finance Minister Tendai Biti, who stated that the Annual Return for RRL for 2009 was 75,000 carats — exactly 25% of the potential annual yield.
RRL sold its first diamonds in June 2007, amounting to almost 50,000 carats, despite statements unveiled by Biti that showed that they had been mining continuously from November 2005 to May 2007, some 16 months.
RRL should also have declared and marketed another 600,000 carats between May 2007 and December 2009.
No rational explanation has ever been forthcoming as to why it did not. One reason could be because River Ranch, as with Marange, has a direct connection to internecine squabbles that broke out within ZANU in 2007.
At the time it appeared Mugabe would not contest the 2008 election and the Mujuru and Mnangagwa factions set about securing support for their respective presidential bids.
Among some key western countries the Mujurus were perceived to be the acceptable face of ZANU, and a more realistic bet than the MDC, who was facing its own internal divisions at the time.
The thinking was to create an entity from within ZANU that was financially able to assume power smoothly and restore relations with the west.
Mnangagwa and the securocrats sponsored a counter revolt to destabilize the party — which Mujuru largely controlled — with funds from Marange.
Much of ACR’s problems stem from the fact that Solomon Mujuru is a shareholder. ACR contends that his share is no bigger than 3%, worth a monetary value of 240,000 pounds sterling.3 No one believes that.
“There is nothing about Solomon Mujuru that is small time,” says one industry insider. “He is not the kind of guy who buys shares and sits back waiting for the investor newsletter.”
Mujuru was to provide Cranswick political coverage, as the latter comes from a family with the wrong political pedigree. (His family was known to be big supporters of Ian Smith’s Rhodesian Front). Instead, Cranswick is now paying the price for backing the wrong horse in the ZANU succession race.
As is explained elsewhere in this report, it is often erroneously assumed that the only fight for power in Zimbabwe is between the two parties, ZANU and the MDC. In reality, the more explosive turf war is within ZANU.
While Mnangagwa’s support base within the JOC places him closer to Marange’s riches, River Ranch affords Mujuru unfettered access to his own diamond resource — one that he has protected with no less ruthlessness.
Those who have borne the brunt of Mujuru’s persecution are the Farquhar’s and their immediate supporters.
The couple has repeatedly been singled out for special harassment, including frequent imprisonments, house break-ins and death threats, in an attempt to force them to give up the mine.
The intimidation campaign took a very personal and tragic turn in February 2010, when Adele’s brother Richard Amyot and his wife Tecla were murdered.
Police ruled it a murder-suicide but forensics done by the family disputed that finding. Tecla was shot four times, including once from close range at the back of her head while she was lying on the floor. Richard was found slumped in a door frame as though running from the room. He, too, was shot in the head, but from medium range. No gunpowder residue was found either on his hands or at the bullet’s entry point.
Despite all this, the Kimberly Process has never seen fit to interview the Farquhars.
River Ranch is not the only kimberlite mine operating under the radar of the KP. There is “Gono’s” mine, near Gweru in Midlands, named after Reserve Bank Governor, Gideon Gono. It is comprised of two sites, the revenues from which are untraced. Lesser known mines have also come on line near Shangani, again in Midlands; and another RRL-owned mine in Mwenezi, in Masvingo Province.
Extract from:
Diamonds and Clubs
The Militarised Control of Diamonds and Power in Zimbabwe
By Partnership Africa Canada
http://www.pacweb.org/Documents/diamonds_KP/Zimbabwe-Diamonds_and_clubs-eng-June2010.pdf
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