Mines bodies stuffed with Zanu PF cronies

HARARE - Mines and Mining Development minister Obert Mpofu’s appointment of handpicked Zanu PF officials as board members for sanctions-busting mineral agencies has been denounced as blatant crony capitalism.

The State-run Minerals Marketing Corporation of Zimbabwe (MMCZ) is the sole marketing and export agent for diamonds and all other minerals, except gold and silver, mined in Zimbabwe.

While the responsibility of managing such State-owned enterprises is in most cases the responsibility of the country’s professional bureaucracy, the minister has stuffed the board with officials with little if any documented work history in mining, save for their loyalty to the ruling party.

Zanu PF’s long-time chief ideologist, Ambassador Chris Mutsvangwa, has been named head of MMCZ.

And it is a very lucrative appointment with fantastic financial spin-offs, government officials say.

In the controversial reshuffle, the minister retained Godwills Masimirembwa as chairperson of the Zimbabwe Mining Development Corporation (ZMDC), involved in investment in the mining industry in Zimbabwe, and in planning, coordinating and implementing mining projects on behalf of the government.

He also appointed new board members including vociferous lawyer Psychology Maziwisa who joins a board of Zanu PF loyalists including TV journalist-cum-businessperson Supa Mandiwanzira and a mix of other regime officials and few professionals.

However, it would be a mistake to underestimate the significance of Mutsvangwa’s appointment.

The former diplomat is replacing Juliet Machoba — an anti-corruption campaigner, former cop and Parliament officer who has been acting MMCZ chairperson all along. Machoba, who government sources say “was not amenable to certain things”, has been demoted to deputy chairperson.

Mutsvangwa, a former detachment commander with Zanla forces, the armed military wing of Zanu PF during the liberation war and former ambassador of Zimbabwe to Beijing, undoubtedly gains huge influence in the business and political spheres through the latest appointment.

Mutsvangwa was recalled from China in 2009.

His recall from his diplomatic posting was widely interpreted as a demotion but back home he has worked his way up again, first gaining appointment into the State-run Zimbabwe Media Commission board.

Now the former Zimbabwe envoy to Beijing has been appointed to chair the MMCZ, which is responsible for selling diamonds from Marange, where Chinese and military interests are deeply entrenched.

Anjin, a Chinese mining company, is the biggest extractor of stones there, and is closely aligned to Zimbabwe Defence Industries, a State-owned weapons procurer controlled by the military.

China remains an important — and growing — trading partner.

Bilateral trade hit a record high in 2012, and Zimbabwean mining companies in a range of sectors are looking to enter or expand on the Chinese market in line with government’s Look East policy.

And with Mutsvangwa now at the helm of the company which is also government’s sanctions-busting tool, they have an exceptionally powerful lobbyist who can open — and close — all sorts of doors and opportunities for mining firms in Zimbabwe.

Charles Mangongera, a political analyst and member of Prime Minister Morgan Tsvangirai’s MDC, said the appointments were a confirmation of Zanu PF’s web of crony capitalism.

“There are many distinguished Zimbabweans with impeccable business credentials and extensive knowledge of the mining industry who could have been selected to chair those State-owned enterprises but they were overlooked for political expediency,” Mangongera said.

“Both Masimirembwa and Mutsvangwa were appointed because they are known Zanu PF sympathisers and not because they possess any meaningful business skills that will advance the interests of ZMDC and MMCZ respectively.”

The US Department of the Treasury’s Office of Foreign Assets Control (Ofac) has designated the MMCZ and the ZMDC under its sanctions regime targeting the companies for helping the Mugabe regime pillage Zimbabwe’s mineral wealth.

Mpofu, who recently acquired ZABG Bank, will be able to keep a close eye on Zimbabwe’s vital diamonds sector through a man who has proved his loyalty — but also has his own interests at heart.

Mutsvangwa’s position as leader of the MMCZ — and therefore a proxy of the Zimbabwean government — gives him unilateral authority to make moves that benefit Zimbabwe.

Mutsvangwa now heads the team conducting secret diamond sales that are being paid for through third party accounts — ostensibly to avoid the funds being frozen by Ofac.

For example, last year alone, the trade embargo on diamonds from Marange fields cost the southern African nation about $30 million through Ofac seizures, according to minister Mpofu.

The State firms have been forced to use a “circuitous method to secure payment” to avoid detection of the money by Ofac.

The shadowy system has allowed kleptocratic officials to rip off the system for the benefit of politicians and their cronies who have a vicelike grip on the diamonds sector.

Critics say a strong, effective and efficient bureaucracy is essential if the State is today to play an effective role.

Deputy minister of Mines Gift Chimanikire, has openly lobbied for the lifting of targeted measures on ZMDC and MMCZ to avert further theft of State cash.

The Ontario-based Partnership Africa Canada (Pac) claims Zanu PF has looted about $2 billion from the Marange fields, partly to fund the nation’s military, which is seen as loyal to Zanu PF.

“Conservative estimates place the theft of Marange goods at almost $2 billion since 2008 and the funds are going to enrich members of Mugabe’s ruling circle and gem dealers,” Pac, a member of the Kimberley Process, the world regulatory body on the diamond trade, said in a November 2012 report.

Mutsvangwa now has direct responsibility for the sanctions-busting.

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