Maravi

(HERALD) Zimbabwe sitting on treasure trove

Zimbabwe sitting on treasure trove
Sunday, 25 September 2011 00:54 Local News

Presidential Debate: Senator Monica Mutsvangwa hails the State Mineral Exploration Company and Diamond Bills in a Senate debate on Thursday, 22 September 2011.

All indications are that this Session of Parliament will be very busy. President Mugabe has called for several important Bills to be debated and passed. My considered judgment is that this will be another signpost towards giving Zimbabweans a more fruitful environment to carry out their daily activities.

Among the many Bills, I am going to concentrate on the mining domain as I believe that we are on the threshold of a game-changing paradigm in how we run our national accounts system and how we plan our national economy.

Zimbabwe is endowed with bountiful resources that put it atop in the world in terms or potential wealth in relation to its population. They include fertile and well-watered soils that ensure good harvests and great animal herds. Most important are the underground natural resources which make the country shine in the Olympics of minerals. Platinum and chrome on the Great Dyke, diamonds at Chiadzwa-Marange and ubiquitous gold all vault the country into the top ranks of resource countries. Zimbabwe shines in a bevy of other minerals that include coal, iron ore, nickel, methane gas and lithium.

The legend of the country, which centres on the Great Zimbabwe civilisation that thrived for centuries since the 8th century AD, is partly anchored on the trade in minerals like gold, copper and iron that the various Munhumutapa kingdoms produced. These minerals were the drive for the booming and rewarding commerce that the Zimbabwe plateau carried out with littoral states such as Egypt, Arabia, Persia, India, Indo-Malaya and even far off China in a giant free trade zone for centuries.

It is the fame of this trade (together with the terrestrial Silk Road with China), that would launch Portugal into a sea-faring nation whose menacing galleons went on to monopolise the Indian Ocean trade to the decline of other nations as they occupied major Indian Ocean trading centres like Sofala, Malindi, Zanzibar and Goa. It is for this reason that the Portuguese monarchy quickly established an embassy at the Court of King Munhumutapa as soon as they rounded the Cape peninsula in their search of the route to the East.

The fame of Zimbabwe’s mineral wealth continued unabated over the centuries as European might grew with the advent of the Industrial Revolution spawned by England. The partition of Africa by European imperial powers saw Zimbabwe fall under the control of England. This act was by dint of the exploits of arch-imperialist Cecil John Rhodes, a geologist who firmly believed that the legendary biblical King Solomon’s gold mines lay in Zimbabwe.

Notwithstanding the disappointment of a major gold find akin to the Rand, Zimbabwe’s minerals continued to excite minds of colonial Rhodesia. This possession of the mineral went on to ignite a fight for control pitting the British South Africa Company against the white minority settlers after the Responsible Government referendum of 1923. The settlers emerged victorious in 1938 when they wrestled the control of the colony’s mineral rights out of the BSA Company which basically championed the interests of international capital housed in London, New York and other Western financial centres. The corporate successors to the BSA Company are Anglo-American Corporation and De Beers, its diamond subsidiary.

The advent of majority rule in 1980 has witnessed concerted efforts by international capital to try to retain control of the country’s minerals by hook or by crook. The fight for Zimbabwe’s minerals lies at the heart of the demonisation of the country and the imposition of illegal economic sanctions. It is also the driver of the campaign to deter Zimbabwe from freely trading its Chiadzwa-Marange diamonds by abusing the Kimberly Certification Process.

These hostile actions at the behest of international capital also include the selective release and even downright denial of exploration data to the Government of Zimbabwe so that it lacks vital information and key intelligence of the role played by the country in global resource commerce.

The end result is there for all to see. A resource-rich Zimbabwe is now ranked among the poorest countries in the world while mining conglomerates declare hundreds of millions in profits, all banked offshore.

None of the major mining houses have accounts within the national banking system. The only benefit that has been accruing to the country is a pittance to local labourers.
The country has largely been untouched by the global resource boom coming out of the new growth economies of China, India and other BRICS countries. While resource-rich Australia was laughing all the way to the bank with its population enjoying a resource dividend, there is abject poverty that reached cholera proportions in 2008 in Zimbabwe.

Unemployment is rife to the levels of 80 percent. A chunk of the well-educated working age population had to become Diaspora economic refugees within the Sadc region and beyond. The physical landscape of Zimbabwe is littered with ghost towns like Mhangura, Kamativi and Empress that used to be thriving mining communities. These are the eyesores of a scoop-and-discard mining policy that will scar the landscape forever. To date, Zimbabwe has been by-passed by new capital in this globally important resource sector. The main reason being the hogging of mineral rights by historically dominant Anglo-Saxon oligopolies to the exclusion of competition from new players out of China and other BRICS countries as well as other emerging economies such as Turkey, Vietnam and Indonesia.

Most damning is the absence of a meaningful mineral resource stock market in the country whose globally recognised attribute is its vaunted mineral wealth.
All the major mining companies are trading their stocks of Zimbabwe’s mineral wealth in foreign bourses in London, Toronto, Sydney, Zurich and New York. In addition to being robbed of its minerals, the country is denied ability to trade in the securities that are derived from the same minerals. Our mineral wealth is not supporting the national balance sheet, reducing us to a beggar country.

Yet the major mining companies are borrowing in the capital markets using the same minerals. One just needs to read the prospectuses of these mining majors when they raise capital.

If Zimplats can raise capital on the back of platinum mineral rights of the Great Dyke, I am very sure that Ministers Mpofu and Biti can do likewise for Zimbabwe. After all, they are jointly the rightful owners on behalf of the people of Zimbabwe.

Is it not a parody that the Zimbabwe Stock Exchange is a bourse that is reliant on manufacturing industries while Zimbabwe is not a world-class industrial player such as China, Germany or Japan?

It only boasts two mining counters, yet our forte as a nation is bountiful mineral wealth. It is indeed sad that such riches cannot be the basis of a thriving banking or financial services sector that Zimbabwe rightly deserves. Our banks rely on bank deposits of poor wage earners.

Ever since diamonds were discovered at Kimberley, South Africa, in 1867, this lucrative industry of glamour and glitterati has wrought war and havoc, streamed blood, sweat and tears to the Africans who supply over 70 percent of global gem diamonds.

We are lucky to discover our diamonds in the era of independence. Had the Marange-Chiadzwa diamonds been found earlier, racist Smith and his imperial backers would have gone beyond grand scale massacre to systematic racial genocide akin to the fate that befell Australian Aborigines and the American Red Indians.

The thunderous anger that has to date characterised the KPCS on Zimbabwe diamonds is a hallmark of the anger of the unrequited predatory greed of post-imperial Anglo-Saxons over our diamonds!

It is for this reason that I heartily applaud the President’s speech in calling for the speedy establishment of a State Mineral Exploration Corporation and Diamond Mining Policy and Diamond Bills.

Such statutes are the logical follow-up to the fight for the ownership of our resources so generously bequeathed us by the benevolent Almighty God.

We need the clear and full information of what minerals we have, the quantity and the quality of the various ore bodies.

This data bank is invaluable in our dealings with foreign investors. We will negotiate from the vantage of informed knowledge, wringing out every dollar we deserve in the process.

Such a data bank will also help enhance national pride because every Zimbabwean will know exactly how much he is worth just like the Saudis and Kuwaitis do with their oil wealth. Nearer home we have our Tswana neighbours who always boast of their diamond reserves.

Needless to say, our patriotic resolve to defend the motherland in the turbulent if nefarious global times will also be strengthened.

As we deliberate on these mining Bills, I am hopeful that honourable members make full use of modern information means including the Internet to glean the latest thinking in the robust global debate on natural resources and resource-nationalism.

The arrival of the new economic powers, China and India, as well other BRICS and emergent nations, has injected a new dynamism into this topic.

We must be ready to learn so we import the best practices from countries as diverse as Australia, Norway, Khazakstan, South Africa, Uganda, Venezuela and Kuwait, to name but a few.

I am proud to say that our education system and the exposure to the Diaspora have engendered a national economic cadreship that can play its full part in this important domain of resource-nationalism.

In the event there are knowledge gaps, they can always be filled by global expertise that is available in the marketplace.

At the end of the day, I am confident that we shall pass Bills that will be a milestone in national economic development and will give the best living standard to our people.

- The Sunday Mail

Labels: DIAMONDS

posted by MrK @ 7:01 PM