Saturday, December 06, 2008

(TALKZIMBABWE) Why did Bush and Brown spare Anglo-American?

Why did Bush and Brown spare Anglo-American?
Pride Munemo -- Opinion
Thu, 04 Dec 2008 21:05:00 +0000

MANY mining companies have been put on the sanctions list by the United Kingdom (through the European Union machinery) and the U.S., through various Executive Orders issued by outgoing President George W. Bush. A quick scan of these companies reveals that almost all of them have to do with mining or minerals processing. Individuals put on the sanctions list, who are not part of the Zimbabwean government, have something to do with mining.

Interestingly, one of the biggest mining giants, Anglo-American has been spared by the EU and the US. Although it is one of those companies that is bringing foreign currency into Zimbabwe, it has not been designated by President Bush or by the EU. This is very interesting.

MDC Treasurer-General, Roy Bennet, unsurprisingly, said in June this year that all mining deals agreed with the Government of Zimbabwe will be reviewed. One mining concern potentially in the firing line was the AIM-listed Central African Mining and Exploration Company CAMEC, yet Anglo American, which is investing US$400 million in Unki district, was spared the criticism. This is Zimbabwe’s largest single foreign investment to date.

The company remains defiant in the face of criticism, saying that it has been a long-term investor in the nation, and that it remains in compliance with international laws in its dealings with the Government of President Robert Mugabe. Interestingly, Britain and the U.S., have failed either to sanction, or designate Anglo-American.

Some industry observers believe that Zimbabwe’s potential mining wealth more than outweighs the short-term damage to institutional reputation suffered by companies continuing to operate in Zimbabwe. They are, therefore, ‘weathering the storm’. That effort is supported by big business interests that want to take over from all those sanctioned companies and sanctioned individuals. It is, therefore, important for those big business interests to present Zimbabwe as a high risk investment country, in the meantime; while they maintain their presence in that country. Those countries that are not “big enough” to weather the storm will be driven out.

The plan is well spelt out. President Mugabe’s indigenization law is one of those pieces of legislation that have riled these big business interests, like Anglo-American, who “come-rain-or-thunder” will remain in the country.

President Bush and Gordon Brown have spared Anglo-American from designation and Anglo American has endured “persistent hyperinflation, stringent fiscal policies, and unconducive regulations” which allowed the country to be viewed as a high-risk destination. Surely, these individuals and connected companies should know something about the Zimbabwe economic environment that we don’t.

[Pride Munemo is an actuarial scientist with a UK based insurance firm. He writes from London.]

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