Tsvangirai To Help Mugabe Hoodwink Investors

Gold Nugget: Despite Zimbabwe's vast mineral resources, including first-class diamonds, gold, platinum and uranium, no one wants to come in and invest because they do not trust the ZANU PF government. Morgan Tsvangirai will appear with Mugabe at an International Mining Indaba in Harare next week Wednesday and Thursday. The move may be detrimental to his image, since he has no means to ensure that Mugabe behaves afterwards.

Harare, Zimbabwe, 10 September 2009

Next week on Wednesday and Thursday, Prime Minister Morgan Tsvangirai will join President Robert Mugabe at an International Mining Indaba convened by the Zimbabwe "government". He is due to deliver a speech, as is Mugabe.

Most gold and diamond mining companies in Zimbabwe had scaled down operations drastically, with companies like Bindura shutting down some furnaces as the effects of Zimbabwe dollar hyperinflation and Reserve Bank of Zimbabwe's choking policies took effect.

Investors in the mining sector have been reluctant to come into Zimbabwe to exploit the substantial diamond, gold, platinum and even uranium deposits that lie untapped in our soil.

Of course, they have seen Mugabe take back the licence that had been given to the diamond mining company that was due to exploit the Marange Diamond Fields.

They were also unhappy about Mugabe's law that black Zimbabweans have to own 51% of shares in any mining company or new business investment.

Then there is the issue of Mugabe's contempt for private property rights, which found expression in the Land Reform process.

Investors have been sitting on the sidelines, as a result.

So, at next week's Summit, the Prime Minister will essentially be using his position and image to try and help Mugabe hoodwink these mining investors into coming into Zimbabwe, even though Mugabe has not reversed any of these ruinous policies.

The only "concession" Mugabe has made so far was the announcement made a few days ago that his government will not demand 51% shares in a new diamond mining venture at Chiadzwa. Instead, he now says, they will only demand 50%!

With Mugabe's lack of credibility on this front, it is risky for Tsvangirai to identify himself with the president on this issue.

Most mining investors are hoping that they will be able to ask questions about their concerns, but most of them are adopting only a wait and see attitude, hoping that at some point in the future, there will be an administration in Zimbabwe that appreciates the expense involved in setting up a mining operation and will not make unreasonable demands on those who use their own funds to exploit our diamonds and gold.

Look, it may well be that we will get shockers at this Indaba, because Mugabe's men have given themselves time to loot diamonds and gold from various concessions. If they feel that they have feathered their nests enough, they may now decide to let the industry be governed by world best practice guidelines.

But this is just wishful thinking. The capacity for greed amongst our elite is simply too big.