MINING activities of the Zimbabwe Defence Industries (ZDI) have come under the spotlight as investigations by the Zimbabwe Independent further suggest the local security establishment is involved in a “resources-for- arms” deal with Russia. The government was reportedly working on an agreement with Russia to supply used military helicopters in exchange for platinum claims along the Great Dyke in Darwendale last month.
However, after the meetings, sources say the Russians are now demanding more mining claims to make the deal more lucrative. According to a report in the Russian daily newspaper, Kommersant, US$2,8 billion would be poured into the investment over 43 years.
“Total capital investment in development from 2012 to 2055 is estimated at US$2,8 billion and major investment projects amounting from US$1,5 to US$2 billion will see the construction of a factory in the next two to three years. After that, production of platinum could reach about 600 million ounces,” the report said.
This could be the biggest mining investment in Zimbabwe, dwarfing South African mining giant Implats’ US$225 million acquisition of ZimPlats as well as Anglo Platinum’s US$300 million investment in Unki Mine.
The Russians are currently involved in gold mining in Penhalonga and diamond mining at Charleswood Estate, a farm expropriated by government from MDC-T treasurer-general Roy Bennett with a former PF Zapu company the Development Trust of Zimbabwe (DTZ) in Manicaland province through a partnership known as DTZ-OZGEO.
Since President Robert Mugabe’s fallout with the West and adoption of the government’s “Look East Policy”, the emerging BRICS (Brazil, Russia, India, China and South Africa) countries have shown considerable interest in Zimbabwe. The scramble for Zimbabwe’s resources has seen the Chinese, Indians, Russians and South Africans brokering multi-million dollar deals in various sectors of the economy ranging from mining, agriculture and energy to manufacturing.
At the centre of the current proposed “resources-for-arms” venture with the Russians are RussZim Mining and RussChrome Mining, both partnerships between Russia’s state-owned Centre for Business Co-operation with Foreign Countries and two companies linked to ZDI.
Documents seen by the Independent show RussZim Mining is a 60/40 mining partnership between Russia’s state-owned Centre For Business and Pen East Mining, whose board chairman is Retired Colonel Tshinga Dube.
Dube, who is the chairman of Marange Resources and ZDI general manager, is an executive official at RussChrome.
A letter dated December 6 2005 by Caroline Elizabeth Sandura, a director of Pen East and former Zimbabwe Mining Development Corporation board member, authorises Dube to sign company documents for RussChrome and RussZim.
Sandura’s brief correspondence reads: “The board of directors of Pen East Mining Company does hereby nominate, appoint and authorise Col Rtd Tshinga Dube to append his signature to Memorandum and Articles of Association of RussChrome and RussZim Pvt Ltd in his capacity as director of Pen East Mining (Pvt) Ltd.”
According to RussZim’s records, the company was incorporated on March 2 2006 with one million ordinary shares worth US$10 000 divided between Centre for Business and Pen East Mining.
The directors of RussZim are listed as Michael Louzidis, a Zimbabwean national, and Russian national Anatoly Dvorikov while the company secretary is Charles Tarumbwa. Tarumbwa is also a director of diamond mining firm Anjin Investments jointly owned by China’s Anhui Foreign Economic Construction (Group) and Matt Bronze, which is owned by the military through Tarumbwa and Glass Finish (Pvt) Ltd, as recently revealed by the Independent. RussZim’s address is listed in the company’s records as 10th Floor Tourism House, 55 Samora Machel Avenue, Harare — the same address as ZDI. Investigations show that RussZim is not even operating on the 10th floor where it is supposed to be based as claimed in its company records. In fact, the whole floor is occupied by ZDI.
ZDI was created in 1984 as an arms supplier to the Zimbabwe Defence Forces. According to African Union security sector reform expert Norman Mlambo, ZDI was registered under the Industrial Development Corporation (IDC) because Zimbabwe’s laws prevent the Ministry of Defence from having commercial interests.
“The Ministry of Defence (MoD) had no legislative authority to register a commercial company and in October 1985, the MoD therefore approached the IDC to register the ZDI as a private commercial company and as a subsidiary of the IDC,” Mlambo wrote in a working paper published in Sacdi Defence Digest.
“The IDC was reluctant to become the nominal owner of a company in which they did not hold a single share, but with pressure from government, the IDC agreed to register the company.”
On its website, the IDC describes itself as a “self-financing, national development finance institution.” It was established in 1963 and is wholly owned by the government.
Listed among IDC’s subsidiary companies are Olivine Industries, Willowvale Mazda Motor Industries and ZimGlass, but there is no mention of ZDI whose board of directors includes ZDF commander General Constantine Chiwenga, air force commander Air Marshal Perence Shiri, army commander Lieutenant-General Philip Sibanda and RT Madamombe.
These military chiefs and Tarumbwa are named in the latest Global Witness report, Financing a Parallel Government?, which says Zimbabwe’ security forces are involved in diamond mining activities and might be benefiting from attendant shady deals.
The report also alleges the Central Intelligence Organisation has received US$100 million in off-budget funding from spooky Chinese businessman Sam Pa.
Finance minister Tendai Biti has repeatedly questioned the army’s shadowy interests in mining and warned the militarisation of Zimbabwe’s resources could be funding a parallel government.
ZDI’s network of subsidiaries also extends to agriculture and textiles. It’s involvement in mining through front companies also raises questions of transparency and accountability.
Global Witness and other rights groups have expressed serious concerns at the political implications of Zimbabwe’s state security institutions receiving private funding from shady business interests.
Although the Darwendale platinum venture is currently being negotiated by the government, the Zimbabwean representatives are RussZim and RussChrome, both ZDI linked companies, which suggests the army rather than the civilian government would mostly benefit from the deal like what is happening at Anjin.