Mugabe Opens Mining Indaba, Sounds Like A Broken Record

President Robert Mugabe today opened a Mining Indaba (Zulu word for Conference) in Harare. The conference is being attended by more than a thousand prospective investors from around the world. South African companies, especially, are salivating at the vast deposits of diamonds, gold, platinum and uranium that can be found in Zimbabwe. Lacking the capacity to exploit them, Zimbabwe hopes to sell these assets to willing investors. Zimbabwe's desperation means that the government will likely sell rights for a song. Which means that, later on, resentment will rise when the mines start functioning, and you will see attempts to reverse these deals. Which will start yet another downward spiral

Harare, Zimbabwe, 16 September 2009

Robert "The Solution" Mugabe opened a big Mining Conference a couple of hours ago here in Harare and sounded like a broken record throughout.

The Zimbabwe president again brought up the issue of sanctions, which he said, "serve no purpose and are harming the ordinary person."

Mugabe also sounded another familiar tone, saying that mining houses should pay royalties to communities in which they operate "in order to empower them."

The problem is that this move would only benefit the local ZANU PF officials, who will take those royalties and abuse them without developing the areas in which these mines operate. Anyone who challenges them on this will then be labeled an opposition supporter and "dealt with."

Mugabe, who leaves next week to for New York to attend the United Nations General Assembly, also acknowledged that for the sector to be revived properly, "everyone must be committed to make sure (sic) that the mining environment is predictable."

What has been predictable to date is that the Zimbabwe government is so greedy that it thinks nothing of breaking their word to investors, that they can move goalposts at any time that suits them.

The Marange Diamond Fields, for example, are being looted now after the company that had been given the contract to develop them was booted out by Mugabe's men.

The aftermath saw a free-for-all, with villagers panning and digging for the diamonds, selling those loose diamonds for a song to shady characters who drove in from South Africa and wasting that money without contributing at all to the development of Marange, never mind the country.

When the army moved in, things did not improve, but instead got worse and it is now widely accepted that the cream of Mugabe's armed forces are benefiting from these diamonds at the expense of the state.

The diamonds are also being used to fund a war chest for ZANU PF, which is gearing itself for new elections, as they are sure that Morgan Tsvangirai and the MDC will soon walk out of the coalition in frustration.

While Mugabe told the gathering that his government has come up with an environment that is conducive to the mining sector, the facts on the ground say otherwise.

Only recently, the Inclusive Government announced that it would seek no less than 50% shareholding in any new venture with any company that seeks to develop the Diamond Fields.

The problem then becomes trust, which is sorely lacking right now. Investors are afraid that the government can wake up tomorrow and decide to use its 50% majority to kick out the other partner after the mining operation has been developed.

There are idiots in ZANU PF who see nothing wrong with walking into a fully-operational mining concern and declaring that it now belongs to them because "the land is ours."

The fights in the Inclusive Government between Mugabe and Tsvangirai also mean that there is no likelihood of the investor community rushing in just now. They had seen the MDC as a stabilising influence in the Coalition, a voice of reason.

But now, things are a bit different and Mugabe is showing that he has no reason whatsoever to try and behave, since he considers the MDC an unwanted partner in government now.