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Sino-Zim: ‘CIO, Sam Pa joint venture’

IN the eighth instalment of the latest Global Witness report, Financing A Parallel Government? which makes interesting revelations about Chiadzwa, the document explains Zimbabwean business activities of Sino-Zimbabwe Development (Pvt) Ltd, which the organisation believes to be a joint venture between the CIO and Sam Pa of the Queensway syndicate. The Global Witness report sheds light on activities unfolding at Marange diamond fields, detailing who is involved and the intricate networks comprising the Chinese and Zimbabwe security forces — the army, police and intelligence services — dealing in diamonds, cotton and property sectors.

Recommendations for Zim’s unity govt

  • Zimbabwe’s government of national unity (GNU) should pass legislation banning serving and recently retired members of the military, police, the CIO and other members of the security services from control over, or beneficial ownership of, mining companies.


  • The GNU should publish all mining concession contracts and other relevant agreements. The government should also immediately review all other contracts in the Marange diamond fields, and audit concession allocation procedures and operations conducted so far, to see whether they represent a good deal for Zimbabwe.


  • The GNU should design new transparent and fair concession allocation procedures designed to maximize public benefit.


Activities of Sino-Zimbabwe Development
We set out the Zimbabwean business activities of Sino-Zimbabwe Development, which Global Witness believes to be a joint venture between the CIO and Sam Pa of the Queensway syndicate.
Sino-Zimbabwe Development has a small but not insignificant presence in Zimbabwe. The Queensway syndicate’s arrival in 2009 saw reports of US$8 billion deal involving:

  •  The construction of a railway line between Harare and Chitungwiza;
  • Improved electrification and signalling on the Harare-Gweru rail line;
  • Improvements to Harare International Airport;
  • An investment to restart gold mining at the Connemara mine;
  • A US$500 million partnership with the Reserve Bank of Zimbabwe, with its subsidiary Fidelity Printers and Refiners, to purchase gold from local miners. However, while Memoranda of Understanding were signed, few, if any, of these projects materialised and reports of US$8 billion deals are overblown. In practice, the Queensway syndicate’s presence in Zimbabwe centres around three activities: diamonds, cotton, and property deals. The following are details of the business activities.

Several reliable sources have told Global Witness that Sam Pa has been involved in two diamond-related operations: a buying programme, and a mining concession in the Marange fields. At the time of publication, in June 2012, Sino-Zimbabwe Development still employed at least six individuals in Zimbabwe who describe themselves as involved in the diamond industry, including cutters and polishers, indicating that the company may still be involved in the diamond trade in some way.
CIO documents seen by Global Witness reveal that Sam Pa has been buying high quality diamonds sourced from Marange diamond mines from 2008 until at least summer 2011. This was reported on contemporaneously in 2009 by Africa-Asia Confidential: “China International Fund moved to set up a purchasing operation at the Marange diamond mines, which have been controlled by soldiers and bosses of the ruling Zimbabwe African National Union — Patriotic Front (Zanu PF), in another example of its brashness and political insensitivity.”
The CIO documents describe how he signed a two-year contract to buy diamonds in exchange for funding both the Zimbabwe Defence Forces and the CIO and would arrive at monthly intervals at Harare International Airport in a white Airbus A319CJ private jet (registered as VP-Bex) and depart with diamonds. The presence, but not the frequency, of this plane at Harare International Airport can be corroborated using public sources.
In a concession allocation process involving no open bidding or transparency Sino-Zimbabwe Development was awarded a concession in Marange in early 2011, after which it embarked on a short period of exploration. This phase, involving sampling of the concession area, was led by Samicor (the trading name for Sakawe Mining Corporation (Pty) Ltd), a company registered in Namibia, and 76% owned by Samicor BVI, which is in turn owned by LL Mining Corporation, registered in Israel.
In an interview with Ha’aretz, an Israeli newspaper, LL Mining is described as controlled by Lev Leviev, a diamond magnate. Samicor personnel Grant Rau (chief geologist) and Eli Sher (mine manager) were active in the Sino-Zimbabwe Development concession in Marange. During this phase, Zimbabwean cutters and polishers were recruited by Sino-Zimbabwe Development, and sent to Namibia to be trained by LLD Diamonds, another company owned by Leviev.
Global Witness has seen no evidence to indicate that Leviev, Sher, Rau, Samicor, LL Mining Corporation, or LLD Diamonds or their directors or beneficial owners knew of the role of the CIO in Sino-Zimbabwe Development.
In April 2011, however, Sino-Zimbabwe Development had ceased operations and filed an application for a new concession. In January 2012, the company was reported to have left the concession and claimed that its sampling showed that mining was not economically viable in that zone. The parastatal, Zimbabwe Mining Development Corporation, has taken over the concession area. It is not known whether Sino-Zimbabwe Development has been granted a new concession.
In June 2010, the Zimbabwean Cotton Marketing Technical Committee, a statutory body under the Ministry of Agriculture, granted a licence to Sino-Zimbabwe Cotton Holdings (Pvt) Ltd to purchase cotton. Interviews with several sources have confirmed that this firm is in effect the same company as Sino-Zimbabwe Development. Sino-Zimbabwe Cotton also have been represented in the media by Jimmy Zerenie, also a director of Sino Zimbabwe Development.
However, Global Witness has not been able to locate the documents listing directors for Sino-Zimbabwe Cotton Holdings at the company registry.
In court documents, several senior Zanu PF government officials are alleged to have “spearheaded” the entry of the company into Zimbabwe. Under the terms of licence Sino-Zimbabwe Cotton was obliged to comply with a number of conditions, including to operate within the common buying system and not to buy seed cotton that had already been contracted to other farmers. The company was quickly embroiled in a legal dispute with the Cotton Ginners Association Zimbabwe, the organisation which represents the Zimbabwean cotton industry. — To be continued next week.

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