Political patronage threatens Zimbabwe's mines

Political patronage threatens Zimbabwe's mines

MAWERE

• Zim clarifies Mugabe mine-grab policy

• Mugabe wants 50pc shares in mines

• Anglo America mining rights revoked

• Mugabe gives 49pc mining rights to blacks

• Mnangagwa in dirty gold scam

• IMF team on surveillance mission in Zim

By Ray Matikinye

BULAWAYO– Forty-five kilometers east of Masvingo, the first settler town in Zimbabwe lies one of the two mines that produced a fifth of the world’s finest chrysotile asbestos.

Almost equidistant from a mine which employs 1 900 workers at Mashava, lies yet another asbestos mine in Zvishavane, where close to 3 500 are employed. Both mines had, with a good measure of success, withered the storm of an international call to ban the mineral blamed for causing asbestosis.

Both mines symbolized the groundbreaking of an indigenous entrepreneur into the mining sector too.

Yet again both mines share an identical fate. They are emblematic of Zimbabwe’s skewed indigenization policy. They amply illustrate how the country’s indigenization programme has faltered on its test-run owing to the pitfalls of political patronage.

The saga surrounding the two mines seems to prove true that ageless adage: “A mine is a hole in the ground with a fool at the bottom and a liar at the top.”

Gutsy entrepreneur, Mutumwa Mawere took over the twin mines in 1994 after President Mugabe put on the kibosh on Zanu PF kingmaker and former army general Solomon Mujuru’s bid for Zimbabwe chrome producer, Zimbabwe Mining and Steel Company (ZIMASCO).

The media crowed after the acquisition of Shabanie and Mashaba Mines (SMM,) hailing Mawere’s business deal as “a first in post independent Zimbabwe in line with government’s indigenization policy.”

Over time the acquisition has become an icon for how the indigenization thrust could be easily swindled by those with connections in high places, as has been custom with all other purported attempts at empowering Zimbabwean indigenous people.

Mawere’s case is also illustrative. It illustrates how the bigwigs in Zanu PF are intolerant of cronies and protégés they deem to have prospered and flourished beyond their initial expectations.

Mawere became an instant business mogul acquiring diverse businesses that ranged from bolt manufacturing, steel works, agricultural concerns, retail outlets and established a bank not much out of business acumen or entrepreneurial skills but out of exploiting an indigenization program steeped in political patronage.

Now the businessman has become a fugitive, running away from a collapsing empire in a proverbial case of having two many pokers in the fire.

Unlike, his other Zimbabwean business peers who have made South Africa and other countries in the diaspora their home after fleeing political persecution for spurning political sponsorship, Mawere ran with the hares and hunted with the hounds. He profited from Zanu PF patronage system to build a vast business empire in record time.

At a time when government made it mandatory that all minerals be marketed through the Minerals Marketing Corporation of Zimbabwe (MMCZ), Mawere was allowed to market his own product outside the parastatal. He always asserted he was a businessman, not a politician although he benefited immensely from political connections to secure bank loans in scarce foreign currency.

His business empire allegedly owed the state $350 billion.

A South African company under his belt also allegedly owes US$18 million in unremitted proceeds from the sale of asbestos outside the MMC.

Mawere’s fortunes turned for the worse when he looked down on a junior post in Masvingo Zanu PF provincial executive. A fortnight after doing so, hordes of militant Zanu PF youths invaded one of his empire’s farms claiming they were land-short. Observers said Mawere saw ugly side of his mentors and fled.

But Mawere’s ill luck has given Mugabe a plum excuse to fulfill his desire to partially nationalize the mining sector. This is despite a record littered with failures when he formed the Zimbabwe Mining Development Corporation to initiate state entry into the mining sector. Mines such as Kamativi, and Mangura under the ZMDC stable have closed down, making thousands of workers jobless.

Mugabe says his government is not going to seize the mines arbitrary but will negotiate with the owners for a major shareholding in those mines. "We are going to demand that government be given 50 per cent shares in the mines. We cannot recognize absolute ownership of our resources. That must be corrected."

Mining is one of Zimbabwe's most vital economic sectors, and one of the few sources of foreign currency left in the midst of an economic crisis following the collapse of the once robust agricultural industry.

UZ's Graduate School of Business and Management analyst, Prof Tony Hawkins, said Mugabe's remarks were damaging to the economy. “These statements do not inspire confidence, and are damaging to the economy,” Hawkins said.Zimbabwe has a wide range of minerals and was a major world producer of gold, diamonds, platinum, chrome, asbestos and lithium. Until the last four years when production plummeted.

According to mining experts the country used to be the continent's third largest producer of gold, after SA and Ghana, but output has since dropped from 30 tons a year to 12 tons last year. Gold mining is, however, recovering thanks to a number of incentives introduced by Zimbabwe's central bank and is expected to produce an output of 22 tons this year.

International mining consultant John Hollaway said: "Every time the government gets involved in the mining industry, it loses."

It still remains to be seen whether the age-old adage about mines being a holes in the ground with fools at the bottom and liars at the top will withstand the test of time.
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