Govt collaborated with illegal panners at Marange

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THIS week the Zimbabwe Independent — which last month began publishing fresh stories based on our ground-breaking investigation into the Marange alluvial diamonds discovery and subsequent looting — exposes collusion between the state and illegal dealers in the grand theft of the precious mineral before a nasty fallout frayed relations.

Elias Mambo/ Obey Manayiti

This special series is supported by the Investigative Journalism Fund.

In a scandalous liaison that would lay the groundwork for illicit dealings which facilitated looting and pillaging on a massive scale, the government initially collaborated with illegal panners by buying diamonds from them.

Farai Maguwu, a civil society activist and director of the Marange-based Centre for Research and Development, told the Independent in an interview this week that the Minerals Marketing Corporation of Zimbabwe (MMCZ) in partnership with the Reserve Bank of Zimbabwe (RBZ) would carry out mop-up operations around 2007.

“The MMCZ and the RBZ would come to Marange to carry out mop-up operations where they were buying all the diamonds from the artisanal miners using the Zimbabwe dollar (Zim$).

“Miners would celebrate, saying bag rauya (cash has arrived) as they would rush to deliver their diamonds to the government buyers. However, it is during the same period that we witnessed an increase in foreign buyers who were using the US$.”

Maguwu also said the influx of foreign buyers became a cause for concern for the government which was now losing out as artisanal miners shunned the MMCZ and RBZ officials.

“Once government discovered that miners were now supplying foreign buyers, a number of interventions were introduced, resulting in foreign buyers camping in Mozambique.

“Miners would then go across the border into Mozambique’s Manica province to meet with foreign buyers.

Maguwu said it was at this time that government introduced “Operation Hakudzokwi” (no return).

Government, through the MMCZ, whose mandate is to regulate the selling of minerals including diamonds produced by informal diggers, soon found itself vying to control the diamond trade.

The MMCZ was established through an Act of Parliament (MMCZ Act Chapter 21:04) and began operations in March 1983. It is 100% owned by the Government of Zimbabwe and falls under the ambit of the Ministry of Mines and Mining Development. It is an exclusive agent for the marketing and selling of all minerals produced in Zimbabwe except silver and gold.
Not only was the MMCZ buying diamonds illegally but it also failed to fulfil its mandate insofar as conducting due diligence on some of the people who were involved in diamond mining such as the Canadile directors who were eventually deported.

In the book Facets of Power: Politics, Profits and People in the Making of Zimbabwe’s Blood Diamonds, Tinashe Nyamunda, one of the editors, explicitly describes government’s collaboration with diamond diggers and the eventual fallout leading to the introduction of various security clean-up operations meant to flush out illegal dealers.

In a chapter titled Free-for-all: Artisanal Diamond Mining, Nyamunda states that: “The discovery of diamonds in Marange in 2006 and the subsequent artisanal diamond rush in a period of ‘free-for-all’ mining resulted in an informal economy with important economic multiplier effects”.

Diverse economic and political factors provided the key motivating factors for the diamond rush experienced in Marange in 2006. These included the state’s move to confront and control new commercial mining capital in Marange, the politics and rhetoric of ‘indigenisation and empowerment’, and a deepening economic and social crisis in Zimbabwe which saw household incomes and formal employment’s viability plummet sharply.

In the latter case, the decline of household income in poorer communities in rural and urban areas was compounded by disruption of the commercial farming sector by the fast-track land resettlement programme, and turmoil associated with Operation Murambatsvina in several urban areas in 2005.

With the decline of the rural economy, the pressures for obtaining “off-farm” income increased, and informal sector diamond mining soon represented an alluring prospect for income support. It was not long before government and senior state officials, recognising the inherent economic value of Marange, moved to challenge the role of the burgeoning informal diamond mining sector. By 2008 it had been effectively displaced by means of state-sanctioned violence, legal intervention and other forms of regulation.

An initial challenge to government was the dislodging of African Consolidated Resources (ACR), the mining house which had acquired an exclusive prospecting order (EPO) for an important part of the diamond fields following the exit of De Beers in 2006.

When the existence of artisanal diamonds became publicly known in that year, government aimed to displace ACR both legally and by resorting to political means through the invocation of indigenisation and empowerment principles. At a rally attended by Manicaland Governor Tinaye Chigudu, MMCZ director Onesimo Moyo and Minister of Mines and Minerals Amos Midzi, government officials argued that ACR was a British company with no right to exploit the indigenous resources of the country. On September 25 2006, the Deputy Minister of Mines, Tinos Rusere, encouraged artisanal miners to continue mining and selling their diamonds to government.

Communicating through the local media, Rusere encouraged local villagers to start mining in place of “foreign” mining capital “as long as it benefitted the local inhabitants’ families”.

Some saw the state’s actions in the context of populist politics: “as it had done with white-owned farms in 2000, in 2006 it did with white-owned mines — Zanu PF played the race card”.

For others, government’s cancellation of ACR’s EPO undermined conventional property rights within the context of discourses of land ownership in the post-2000 period, and deployed a parallel rhetoric of ‘indigenisation’ to justify seemingly extra-legal interventions.

In the process, land patronage networks were reorganised in the communal areas affected by artisanal diamond claims: where local inhabitants claimed traditional tenure, the state principally weakened it, assuming the role of guardian of the land and its resources. In the uncertainty of tenure rights which resulted, Chiadzwa was laid open for thousands of magweja (artisanal miners) who soon descended on the diamond fields with government’s tacit blessing.

The term “free-for-all” denoted the organisation of production and trade, in which people could get involved in diamond digging, buying, smuggling or become part of the commerce that exploited the operators.

The networks of extraction and trade soon came to involve the agencies meant to supervise and uproot “illegal” diggers: the police and other state security agencies, including the army and intelligence personnel. Direct participation in syndicates and indirect earnings through bribery became a feature of the accumulation matrix in Marange. State security deployed to Marange was porous, and this made the diamond fields accessible to a broad community of magweja.

While the state had initially hoped to use the MMCZ to regulate the selling of diamonds produced by informal diggers, it soon found itself contesting for control of the diamond trade with an emerging illicit network and the economy on the margins. Many magweja were suspicious of the intentions of the state and the role of the MMCZ.

Some argued that the state wanted to acquire diamonds on the cheap without heavily investing in production, and leaving magweja to assume a high burden of the risk.

Disenchantment and uncertainty over the MMCZ’s capacity to pay good prices in cash for stones quickly opened a space for illegal buyers and dealers who could offer better prices and pay immediately in foreign currency.

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