Zanu fatcats battle it out in mining sector

r – less is known about the impact on the mining sector. A joint briefing from a Dutch policy and analysis NGO duo, the Netherlands Institute for Southern Africa 2007 and Fatal Transactions helps bridge this significant gap.
In the late 1990’s the report notes that ‘Zimbabwe was poised to become a significant force in African mining’. It was rated third among African gold producers. The collapse of the rule of law and economic mismanagement – especially an overvalued exchange rate – shattered this potential. Exploration spending and investment has all but dried up. Gold production – which earned up to a third of the country’s foreign exchange – had slumped from a peak of 27 tons in 1999 to 8 tons per annum in early 2007. The country has lost out on the recent boom in commodity and precious metal prices.
The impact has not only been economic but social, too. Mining unions’ affiliation with the political opposition incurred punitive attacks on the part of the ruling party, compounding socio-economic decline with widespread violations of miners’ basic human rights.
As in the farming sector, government moves to annex mining assets are couched in terms of indigenisation and black empowerment – euphemisms for the ‘elite-driven, opportunistic asset grabs’. The mining sector has become ‘a critical battleground for the hearts, minds and pocketbooks of key business and political constituencies related to Zanu (PF)’s internal struggle for power.’
The ‘diamond chaos’ seen last year in the newly discovered fields in the Marange district of eastern Zimbabwe illustrates some of the issues concerned. The state encouraged land invasions by informal miners, pushing aside legal title holders, on condition that uncovered diamonds would be sold to the Minerals Marketing Corporation of Zimbabwe (MMCZ).
However the ‘buying prices offered by MMCZ offered lower rates than foreign buyers.’ The MMCZ struggled to find funds to purchase stones. The black market boomed. Mugabe has called for nationalisation in order to rein in rampant corruption and staunch the hemorrhage of revenue. But he has given no indications how degraded public institutions can be revived to cope with the task at hand.
Targeted EU and US sanctions prevent members of the ruling elite from accessing private source of funds to finance indigenisation. But this is not the root of the problem. Indigenisation is not meant to rebalance historical inequities or to ensure greater indigenous self-determination over the allocation of resources. Its motive lies in ‘elite accumulation, not sustained policy making’. The decline of the mining sector in the country is linked to the decline in the rule of law and collapse of governance since 2000. Without reform to address ‘the key questions of transparency, accountability and community participation that are central to the continuing crisis’, the causes of this decline – and its contribution to the decline nationally – will remain unabated. – Henwood works for Amnesty International but writes for The Zimbabwean in his personal capacity.