Zim's China 'mega deals' in doubt

HARARE - Zimbabwe's vaunted multi-billion dollar energy and infrastructure deals with China are “in jeopardy” following Harare’s ill-advised seizure of all diamond mining claims in Chiadzwa, including those owned by Anjin Investments (Private) Limited (Anjin).

The controversial decision does not only have a negative impact on investment inflows into the country, but it has already backfired spectacularly with hundreds of illegal artisanal miners and dealers invading the gem-rich Marange fields in Manicaland since the expropriations were announced.

At the same time, well-placed Zanu PF sources have told the Daily News that Mines minister Walter Chidakwa’s decision — which has apparently enraged the Chinese — was closely linked to the ruling party’s worsening and seemingly unstoppable factional, and succession wars.

“Our Beijing friends, who have walked with us even during our worst times, are understandably very upset with this irrational move. They are also saying that this will have dire consequences for the mega-deals that we signed with them last year,” one of the sources said.

Analysts who spoke to the Daily News yesterday agreed that Zimbabwe risked “losing a lot” from the Chinese, following the State’s violation of an 18-year-old bilateral investment promotion and protection agreement (BIPPA) with the Asian giant.

“The Chinese investors will not just sit and watch their investments going under the drain. They are likely to pressure their government to withdraw its support to Zimbabwe,” analyst Francis Mukora said.

ALL WEATHER FRIENDS?...Chinese President Xi Jingping, with his counterpart President Robert Mugabe, upon arrival in Zimbabwe last year. Pic: Annie Mpalume.

Meanwhile, the under-fire Chidakwa and his Home Affairs counterpart, Ignatius Chombo, rushed to Chiadzwa yesterday in a desperate bid to douse the flames around Harare’s ill-timed move, and chaos that has followed the move.

There were also reports that 50 illegal panners — widely known as gwejas in local parlance — had been arrested at the eastern Zimbabwe diamond fields yesterday, as the government battles to restore order and rid the area of the rampaging makorokozas.

But not all stakeholders were convinced that Chidakwa’s and Chombo’s visit to Marange would yield the right outcomes.

“I’m right inside the diamond fields and we have seen Chombo and Chidakwa coming, and making what is clearly a fake assessment. This trip has been stage-managed to make sure that they go back to President Robert Mugabe and say that their decision was okay,” a government official said.

“The truth… is that Chidakwa has messed up and this will have dire consequences on the economy, and our relations with Beijing, Russia and South Africa (SA), whose businesses have invested heavily here. The biggest challenge will be the Kimberly Process which will come hard on us because the diamonds are no longer secured. This is a monumental disaster,” he said.

In the meantime, a number of foreign companies operating in Chiadzwa are considering instituting legal proceedings to enforce their rights and in a development, which analysts say has further dented Zimbabwe’s battered international image.

Yesterday, the Russian Embassy — representing one of its companies, which operates a diamond venture in Chimanimani — said it had “no comment at the moment”, although it is believed that they were also taken aback by the government’s move.

As it is, Grandwell Holdings (Grandwell) of SA — one of the biggest players in Marange through Mbada Diamonds (Mbada) — has said the government’s move to expropriate its shares was illegal, as this also violated both Zimbabwe’s Constitution and bilateral relations with Pretoria.

As a result, the company is contemplating dragging Chidakwa to court if he “does not reverse his decision to forcibly grab its Mbada concessions”, in what it feels was a clear violation of the agreements between the government and the firm.

In an exclusive interview with the Daily News, Grandwell’s chairman, Dave Kassel, also disclosed that they had been assured by Mugabe that their money would be safe when they took a decision to invest in the country.

“Besides the various agreements that we signed… President Mugabe himself said to me ‘you are a serious investor and I will personally guarantee your investment,’ and this among other things, gave us the comfort and confidence to proceed with our investment,” he said.

“Now, the minister has just abruptly decided to stop us… which is illegal and the courts will now have to reverse this based on the agreements we have with the government,” Kassel said.

“Besides, we feel let down because we played a key role in making sure that we removed all obstacles, which hindered the trade of diamonds by Zimbabwe. When we wanted to come in… the then minister of Mines advised us of the difficulties with the Kimberly Process where Zimbabwe’s membership had been suspended at a KP meeting in Namibia.”

“Then there was the issue of artisanal mining going on, where it was estimated that… 50 000 illegal miners were in the area. Our first… task was to secure the area in order to bring control… and we engaged the community… , and brought this under control, thereby opening up for other investors and miners to come in,” the South African-based businessman said.

“We then engaged top attorneys from SA to help fight Zimbabwe’s cause at KP and were instrumental in building a company, which was 100 percent compliant, leading to the government bringing KP monitors… to demonstrate that artisanal mining was under control and that Zimbabwe was now compliant… (and) a development which gave confidence to other investors,” Kassel said.

Although Grandwell had initially been given the exclusive rights to market Mbada’s diamonds, Chidakwa’s ministry had also recently and unilaterally ordered all companies to sell their gems through tenders, he said.

“This resulted in Mbada getting less… and with the company now being forced to pay commission to the facilitator. This tender process also resulted in diamonds being confiscated in Antwerp (Belgium), while some were stolen in Dubai,” Kassel said.

“Grandwell and Mbada were also put on sanctions, and our money was confiscated all because we were fighting for the country’s cause. Mbada suffered for Zimbabwe, they were subjected to abuse by the international community and now we are being subjected to this abuse by Zimbabweans,” he said.

“So far, Mbada has carried out a lot of extensive geological and exploration exercises in the area and the ministry of mines has all the maps courtesy of us. Why then are they now destroying this project?” Kassel asked.

Kassel also revealed that in the six years Mbada had been operating in Marange, they made a gross turnover of $1,1 billion and of the amount, nearly $480 million went to government. He expressed surprise that given their contribution,  Chidakwa decided to nationalise Mbada on the pretext that the company and others were not being transparent in their dealings.

Comments (30)

forget mega deals.....behold "mega bash" munhu wese kuMasvingo!!

nEHANDA nYKASIKANA - 25 February 2016

This Gvt does not have people at heart. This is shocking. But will this ever end. How will it end comrades?

jojo madero - 25 February 2016

A great example of what happens when you invest in Zim, i'm sure we are going to attract a lot of investors after this.

misty - 25 February 2016

zim hit china with a cyclone and china retaliate with threats to jeopadise 'mega deals.' waht mega deals? zim is being fooled by fake promises while the chinamen are looting! and all this is happening while cde rg mugabe is fast asleep. we are foresaken for sure.

SaManyika Chaiye - 25 February 2016

Nonsense, these were not very authentic companies. They were bogus companies masquerading as miners, they neither had the real expertise & the requisite capital to exploit the resources fully. The basis on which they got the mines in the first place was corrupt, politically skewed & unscrupulous... Real mining companies can turn around that place & Mutare can become an economic powerhouse, imagine if Anglo American or De Beers operated there how much development would take place? Part reason why the mines had to be ceased was that they had finished the alluvial diamonds that they got through open cast mining which is just as easy as digging a well. Now the alluvial diamonds were finished, they were now struggling to dig deeper were real diamonds are, because they were not genuine miner. They did not have the equipment & the capital. On the other hand the parasite Zanu pf was sucking them dry.

Leo - 25 February 2016

the Chinese never had interest of genuine investments in Zimbabwe. those guys if left unmonitored they loot big time. they masquerade as brick moulders in Chinhoyi I tell u what they are doing there is more than brick moulding. Chiyadzwa should just be controlled by the govt not thieves. Chidhakwa kunyangwe akadhakwa zvake this time is damn right. take the diamond fields full stop. to hell with the Chinese reaction we don't care.

changamuka - 25 February 2016

I am actually surprised that there are some people including this Daily News reporter, who still think the Chinese companies which were looting diamonds in Zimbabwe were after developing the country!!! When official mining of the diamonds was granted to them since 2007- up to today (9years ago) - all they did was to loot all diamonds, remitting nothing to Treasury, workers going for many months without pay!! Even during the GNU, the then Minister of Finance Biti raised the concerns but unfortunately many in ZANU PF thought he was politicking. The decision by Gvt was long over due!! In fact, team Lacoste and the Lacoste it self were the major beneficiaries including the army. Hence there is need to cut off their finacial supply chain.

Mutongi Gava - 25 February 2016

sanity is finally prevailing at the diamond fields,only the daily news believes mechanised panners are investors,the sceptics are so naive to think that china can sever relations with zim over that,chain needs zim more than we need them

truth - 25 February 2016

Utter nosense,this time Cde Chidhakwa is spot on,this was long over due. Whats this nosense by Daily news of Investors being angry on the nationalization of Dimond mines in Marange. In fact this was over due,Gvt should then go ahead and speed up the mining model being done in Botswana and Namibia,where just one entity is mining diamonds that it becomes easy to control where the money is going,not this situation where every hand is in the pot scenario which was happening in Marange. Pamberi na Cde Chidhakwa,Ma Diamonds kuvanhu zviri fair fair!!!

Mbizi Chihota - 25 February 2016

This is typical of Zim authorities.A trail of destruction after destruction.Under Mugabe there would be destruction until there is nothing to destroy.People can't learn from history.What is happenig at the Coaliary,what happened at Zisco the list is endless?Anything the government of Zanu touches,it rots there and there- kubola khonapho khonapho.There is nothing to celebrate when the government takes such an ill advised and counter-productive decision.

general spinola - 25 February 2016

We were once told by the same paper dailynewszim that the diamond mines were reaping us off our natural resource because only a trickle of the proceeds found its way into the fiscus - the big chunk of it was misappropriated in shade deals by the big fishes. Now the same paper is in the forefront of crying foul that the "diamond dealer companies" are harnessed to control their operations. And the same paper rushes to label the locals who intends to also benefit from their local resource as illegal panners. My question is who if any was legal in the first place ? Registering their companies for the purpose of swindling us of our diamonds cannot be said to be legal in the true sense of the word legal. That was pure cheating. Instead the paper should concern itself with wether the move by Chidhakwa and Co is in the genuine interest of the nation and not a new way of perpetuating the same self-enrichment plans that robes us of our wealth. As for the China deals from my point of view that was a personal deal between Mugabe and the Chinese. Why ? Because Mugabe views our resources (including us people) as his own personal property. They were bound to disappear bit by bit as the clock ticks towards his departure. Nowhere in this world will you see a country run by a person. Only in Zimbabwe. The normal thing is that a country is run by a set of rules and regulations (the law) to which everyone including Mugabe himself should toe the line. As long as we Zimbabweans view Mugabe as a demi God who twists everything to suit his whims then we must be prepared to live with the nonsense we see ruining our lives in the name of a government.

Masamba Akareyo - Tanganda - 25 February 2016

I love it daily news, you are telling it as it is. China never invest in any country, they loot.

dollarman - 25 February 2016

could those who want front seats to the 100years birthday in 2024 get in touch with their local zanu offices

truth - 25 February 2016

This whole thing was chaotic right from the beginning up to today. This claim belonged to Anglo American. Anglo advised the government that there is a lot of alluvial diamonds but requires a great deal of exploration to locate the pipes. It is the pipes that require long term infrastructural investments. Our government fired Anglo American and yet they have the best expertise in the world and could have been the best partners for our government. Botswana has done well with Anglo American. Anglo American are straight for Zanu PF. Zanu PF love chaos to enable them to draw the diamonds without audit. We are waiting for the second phase of chaos from Zanu PF.

Mbareboy - 25 February 2016

The trail of distruction and pollution, caused by these authorised looting panners, disguised as miners on Save river and serrounding streams is epic. Where does this leave zanu pf government? Look West policy collapsed and now East has broken down. I am just wondering if there is a look North policy out there. The problem with Zanu pf is they look like they are fixing something when in actual fact they are creating another mess.

X-MAN IV - 25 February 2016

Our leaders enjoy when there is chaos in the nation. Who is benefiting from this confusion?

Chibwechitedza - 26 February 2016

Zimbabwe will NEVER move forward with ZPF at the helm. They are an inept, greedy, oppressive, selfish and illegal government. They are incapable of making even one rational decision. any Zimbabwean can see that Zimbabwe is destroyed. Entirely. And they have sold their souls to the Chinese who have also plundered this nation. God is not sleeping!

TruthBTold - 26 February 2016

In sharp contrast to her Western counterparts, China is totally reliable and consistent in her policies and has always remained a true friend of the people of Zimbabwe right from the very beginning. What we now have to ask ourselves is: has the Government of Zimbabwe proved itself to be trustworthy and honourable in her dealings with China and other nations? This is something I'm sure is worrying our closest friend? Like many other African countries are we not now trying to play this West versus East game? If so then this might just cause China to review its position. Think about it?

Phukit - 26 February 2016

What aout the employees of the firms. We are sure they are the worst affected. Anyway ,they can visit Goal Worth Global Network Employment Agency for a new page, at Merchant House . Cnr R. Manyika / 2 St Harare or call +263774216604. Goal Worth - Where hope is!!

Goal Worth Global Network Employment Agency. - 26 February 2016

What aout the employees of the firms. We are sure they are the worst affected. Anyway ,they can visit Goal Worth Global Network Employment Agency for a new page, at Merchant House . Cnr R. Manyika / 2 St Harare or call +263774216604. Goal Worth - Where hope is!!

Goal Worth Global Network Employment Agency. - 26 February 2016

What aout the employees of the firms. We are sure they are the worst affected. Anyway ,they can visit Goal Worth Global Network Employment Agency for a new page, at Merchant House . Cnr R. Manyika / 2 St Harare or call +263774216604. Goal Worth - Where hope is!!

Goal Worth Global Network Employment Agency. - 26 February 2016

Rest assured,the Zimbabwean government is in dire need of investors.Surely there is a good reason that is behind the closure.Sometimes Investors or tycoons take advantage of the situation of the situation and abuse their investment power . Something is amiss there. For those who lost their jobs are advised to move on. Visit Goal Worth Global Network Employment Agency at Merchant House Cnr R. Manyika / 2 Street . Harare or Call + 263774216604 . Goal Worth - Where hope is!

Goal worth - Global Network Employment agency - 26 February 2016

This is a farce! how a country can be rundown like cloud cacooland. Will we ever learn? I wonder. lessons I draw from the past decade is there is nothing positive expected from a government which is run by a party which forces itself among the people. Just forget it! After raising people's hopes electioneering and the money spent to hold an election that is dead rubber..now this? Its like a company whick keeps spending without looking at the returns! Spend, spend, spend and more spend! Look at Gushungo holdings, there is nothing there, no basis to make a Balance sheet..(How can one structure a balance sheet on funds that are comandeered into establishing a company) You want to work profit margins? from what? based on which cost structure? Even those auditors are struggling to find formulae how to work whether Gushungo Holdings profit or loss!! Gushungo Holdings is an extrapolation of how the country at large is being run? Very sorry indeed if we still hold we are to ever turn the country's fortunes around with this regime.. Stupid!

Frankly - 26 February 2016

In an exclusive interview with the Daily News, Grandwell's chairman, Dave Kassel, also disclosed that they had been assured by Mugabe that their money would be safe when they took a decision to invest in the country. “Besides the various agreements that we signed… President Mugabe himself said to me 'you are a serious investor and I will personally guarantee your investment,' and this among other things, gave us the comfort and confidence to proceed with our investment,” he said......hmmmmmmmph

hey - 26 February 2016

...personal guarantees that have no basis for legal provision and processes can be problematic i think....

hey - 26 February 2016

Any investor, regardless of who it is would have serious doubts about investing in Zimbabwe right now but especially when one witnesses all the fighting and squabbling going on within the ruling party - equally pathetic is the pathetic behaviour of all the opposition parties? Any major investor, regardless of who they are is looking for stability and a guarantee of their future. Right now we are setting a very poor example. So perhaps those in control of key positions need to take stock of the situation and cease behaving like clowns. We only have ourselves to blame if China does not go ahead with her investment. How can President Mugabe guarantee anything at his age and the fragile state of our Government? LETS GET REAL.

Perekeza Mbuya - 26 February 2016

This is the final nail on zim's economy guys we are not going anywhere

diamond - 26 February 2016

This is the final nail on zim's economy guys we are not going anywhere

diamond - 26 February 2016

Saka minister Chidhakwa akabirwa all the diamonds akadhakwa nemasese here kana kuti kachasu. He looks drunk all the time. Thats why all diamonds disappeared to India and Europe.

Denny Hungwe - 27 February 2016

ZanuPF are eroding the country away as follows:- 1. By Destroying Commercial Farming 2. By Destroying Our Currency 3. By Destroying Business through Indigenisation (Zanufication) 4. By Destroying Mining (The only sector this year with possibility for growth) 5. By undermining confidence through a set of emotionally charged decisions which defy logic, these clowns think with their gall. In the medium term all of these things will bring them down, not through elections but through spontaneous hungry, unemployed mobs in the streets burning and looting wherever they go

Nooshie - 28 February 2016

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