Chris Gordon
The Democratic Republic of Congo faces a new form of colonisation – this time from its ally, Zimbabwe, which last year intervened in the war to save President Laurent Kabila from being ousted by rebel forces. Now it’s payback time for the broke government of President Robert Mugabe.
If a deal for the Zimbabwean Defence Force to become a major partner in the Mbuji Mayi diamond mine goes ahead, Zimbabwean companies will acquire control of all Congo’s state mining companies, Kabila’s chief source of revenue.
Zimbabwean entrepreneur Billy Rautenbach is already chair of Congolese metals and minerals parastatal Gecamines. The Zimbabwean Defence Force is also establishing ventures to buy gold and diamonds from small producers.
Faced with an unaffordable war, the Zimbabwean solution has been to create military business interests in Congo. On both sides, the conflict is now funded by minerals, particularly diamonds.
Zimbabwean’s reasons for involvement with Congo have always been thought to be economic rather than political. But participation in the war has brought the Zimbabwean economy to the brink of collapse, with interest rates of 63% and high inflation forcing down the value of the Zimbabwe dollar.
However, joint military business ventures between the Congolese defence force and Zimbabwe have grown since last year, supporting analysts’ beliefs that foreign troops will remain in Congo because of the new vested business interests. This includes Zimbabweans on Kabila’s side and Rwandans based in Kisangani, from where diamonds flow to Kigali.
Mbuji Mayi is one of the projects under consideration by Zimbabwean Defence Force company Osleg, whose existence was confirmed to Business Day by Zimbabwe’s Minister of Defence, Moven Mahachi.
The Zimbabwean army now controls access to Mbuji Mayi, since Angolan troops were withdrawn. But the large kimberlite mine is likely to prove a major white elephant for any would-be investor after years of neglect.
A mining analyst flew to the region for an expert assessment of the mine’s potential and investment needs, but the results were not encouraging. Last year Mbuji Mayi produced only about $80- million of low-quality industrial diamonds. Most of the better stones are lost to theft and smuggled to Antwerp.
The mine is barely functional and described as being on the verge of collapse. Because of a lack of investment needed to get the mine back on its feet, mining equipment is discarded as it breaks down, leaving small-scale digging as the only alternative. Smuggling from the mine has increased so much that it is thought that official sales have plunged to a new low of only $500 000.
The mine, a joint venture between Belgian company Sibeka and the Congolese government, needed tens of millions of dollars to become fully functional again, and Kabila’s government has been looking for new business partners. But there is no way the mine can be made profitable now, and it seems it has reached the end of its life. A major problem will arise if Mbuji Mayi is left to collapse -the mine provides the local infrastructure to the region: water, power and employment.
A more profitable route is under discussion by Osleg: buying Mbuji Mayi’s diamonds. The defence ministries of Congo and Zimbabwe would capitalise Osleg’s gold- and diamond-buying ventures.
The head of Zimbabwe’s Mineral Marketing Corporation is a shareholder in Osleg. A joint gold- and diamond-buying venture between Osleg and the Congolese army’s Comiex has already been set up.
Zimbabwe’s involvement in cobalt- and copper-producing Congolese parastatal Gecamines is also not providing the expected revenue. Rautenbach has been taking payments in cobalt recently in lieu of repayment of money owed to him by Kabila’s government.
Rautenbach’s own 70%-owned Ridgepointe company mines and markets cobalt from concessions in Katanga province.
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