PRESIDENT Robert Mugabe this week intensified mortgaging Zimbabwe’s mineral resources in a bid to secure fuel from Iran, raising fears about the secu
rity of the country’s mineral wealth used as guarantees in opaque deals.
Mugabe’s desperate hunt for fuel in Iran using minerals as collateral came amid recent reports that China and Russia had also got mineral rights in exchange for financial, trade and investment deals which have remained shrouded in secrecy.
China and Russia have so far failed to give Zimbabwe any significant lines of credit because the country’s credit rating has plunged due to the current crisis. Zimbabwe has been grappling with a fuel crisis over the past seven years.
According to the Iranian news agency, Far, Energy and Power Development minister Mike Nyambuya discussed a fuel deal with Iranian Oil minister Kazem Vaziri Hamaneh who agreed to meet the country’s needs.
“During the meeting, the Iranian side made a number of proposals to meet Zimbabwe’s needs in fuel and oil products, which were welcomed by the Zimbabwean minister,” Far said.
“The two sides also agreed to assign a group of Iranian experts to help to renovate Zimbabwe’s oil refineries. Further in the meeting, Hamaneh said that once Zimbabwe’s oil refineries are reconstructed, Iran would start crude supplies to Zimbabwe in order to meet that country’s fuel consumption needs.”
It is understood Harare promised Iran an array of minerals to settle its debt as it continues to mortgage natural resources to foot its import bill. Reserve Bank governor Gideon Gono has said Zimbabwe will leverage its minerals to secure imports like fuel that government is now failing to pay for due to foreign currency shortages. Nickel from Bindura was recently used as surety in a US$50 million fuel supply deal with French banking giant BNP Paribas.
Mugabe has in the past mortgaged Zimbabwean resources to Libya after clinching a fuel deal with Libya’s Muammar Gaddafi. But the US$360 million deal later collapsed due to Zimbabwe’s failure to pay.
Gaddafi seems to have dumped Mugabe after he started moves to end years of international isolation.
Zimbabwe has been searching for reliable fuel supplies in vain from Kuwait, Angola, Sudan, Nigeria, Venezuela, and Iran. The countries that have sustained Zimbabwe although they are not oil producers have largely been South Africa and
Mugabe met Iranian leader President Mahmoud Ahmadinejad on Monday in Teheran where he attended the fifth joint economic commission meeting for the two nations aimed at strengthening industrial cooperation. Mugabe was accompanied by Nyambuya, Agriculture minister Joseph Made and Foreign Affairs minister Simbarashe Mumbengegwi.
A Memorandum of Understanding was signed on Tuesday under which various deals were agreed including cooperation in energy and agriculture.
Iran has also pledged to build a 1 600MW power station on the Zambezi, while Zimbabwe is set to buy tractors and other agricultural equipment from Iran in the coming two months.