Africa Confidential
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www.africa-confidential.com 26 May 2000 Vol 41 No 11 AFRICA CONFIDENTIAL ETHIOPIA/ERITREA 4 ZIMBABWE/CONGO-KINSHASA Force majeure Addis Ababa’s forces have taken Glittering prizes from the war the Asmara government by A new mining consortium in partnership with Congo and Zimbabwe surprise with its invasion deep into is to be launched on the London Stock Exchange Eritrean territory. Ethiopian war aims have grown exponentially. A new consortium to mine diamonds in war-torn Congo-Kinshasa, Oryx Diamonds, is to be Though still formally committed to launched on the London Stock Exchange on 13 June, in partnership with the governments of expelling Eritrea from the Congo-K and Zimbabwe. The launch will be a major test of market sentiment towards the remaining areas it occupied in British government’s attempts to get buyers to shun ‘blood diamonds’ - stones mined in 1998, a triumphalist Ethiopia now countries in conflict such as Angola, Congo and Sierra Leone. On 22 May, Britain’s Minister says it wants to break Eritrea’s army permanently. Having won its of State for Foreign Affairs, Peter Hain, called for a consumer boycott of diamonds coming 30 year struggle for Independence from war zones. London will be pushing the Group of Eight industrialised countries meeting against Ethiopia, Eritrea is unlikely in Tokyo in July to back an international scheme to outlaw ‘blood’ or ‘conflict’ diamonds. to let that happen. However, many diamond buyers in London and Antwerp say the campaign against conflict diamonds won’t stop them buying rough diamonds from any source they choose. The proposed KENYA 5 directors of Oryx Diamonds say they have no involvement with conflict diamonds and dispute that their diamond concessions in Congo are in a war zone. Linking in the Luo If successful, the Oryx deal will give a financial lifeline to the beleaguered governments in Kinshasa and Harare in their military efforts against the three Ugandan-backed and Rwandan- President Moi and his team are jubilant. They have effectively backed rebel movements which currently control the east and north-west of Congo. It raises derailed the attempts by civil other security concerns as the mining concessions are all in Kasaï-Oriental, south-west of the society to reform the constitution diamond capital, Mbuji-Mayi, and have been a target for the Rwandan-backed Rassemblement and are restricting the debate to Congolais pour la Démocratie-Goma since the outbreak of the Congo war in August 1998. parliament, where the ruling KANU party commands a majority. Key to Moi’s strategy has been securing Arms for mines the support of his old adversary, The Oryx deal involves a profit-sharing arrangement with the private Zimbabwean company Raila Odinga, the leader of the Osleg (Operation Sovereign Legitimacy) of which Zimbabwe Defence Force Commander National Development Party, and Lieutenant General Vitalis Musungwa Gava Zvinavashe is a director. According to its a group of Luo intellectuals. This KANU-NDP coalition is also trying partnership agreement with Congo’s Comiex (a private company linked to the Presidency in to marginalise the Kikuyu-led Kinshasa), Osleg has: ‘the resources to protect and defend, support logistically, and assist opposition behind Mwai Kibaki’s generally in the development of commercial ventures to explore, research, exploit and market Democratic Party. the mineral, timber, and other resources held by the state of the Democratic Republic of Congo.’ Military sources in Zimbabwe regard Osleg as the ‘economic wing’ of the ZDF. It hires Russian-piloted Antonov aeroplanes to move mining equipment to Kasaï’s diamond CAR 6 fields. Rebel RCD forces claim these are the same Antonovs that are used to bomb their positions in eastern Congo. Cleaning up President Laurent-Désiré Kabila’s regime has been able to hold the Kasaï diamond fields President Patassé has been able only because of military backing from Angolan and, most importantly, Zimbabwean troops. to persuade some donors to back Unable to pay cash for Harare’s military help, Kabila has offered mining concessions to several his plans to restructure the army. Zimbabwean private companies controlled by government ministers and military officers. So Bangui’s cooperation is needed as far, Zimbabwe’s commercial efforts in Congo have yielded little besides lucrative pickings for its international airport is to be those officers running their own informal diamond mining operations in Congo’s alluvial used as a staging post for United Nations’ in Congo-Kinshasa. But areas. The war continues to consume President Robert Mugabe’s government’s scarce Central Africans are more worried resources: fuel shortages, mass redundancies, soaring inflation and interest rates in Zimbabwe about corruption. are all blamed on the intervention in Congo. Oryx says its rights to exploit the diamond concessions granted by Kabila’s embattled POINTERS 8 regime are worth over US$1 billion, although it calculates their real value at $208 million, after discounting exploration costs and political risk. Oryx gets 40 per cent of the profits from the Africa/USA, Sudan operation; 40 per cent go to Zimbabwe’s Osleg; and the remaining 20 per cent go to Cosleg (a joint venture between Osleg and Congo’s Comiex). Cosleg, which describes itself as an asset & Sierra Leone management company, shows the high level of commercial coordination between the Mugabe Duty-free; in and out;leaping not and Kabila governments: it can award ‘commercial development contracts, licenses and creeping. rights.’ Through Comiex it gets preferential access to mineral, timber and other natural resources in Congo. 26 May 2000 Africa Confidential Vol 41 No 11 The political brains behind these deals are ZDF Commander Molowaie Kananga Lt. Gen. Zvinavashe, Justice Minister Emmerson Dambudzo Mbuji- Mayi Mnangagwa and Defence Minister Moven Mahachi. They see Kabinda Zimbabwe’s intervention in Congo as a major opportunity to ORYX DIAMONDS expand their country’s diplomatic and commercial reach. Yet CONCESSION AREA Kazumba so far, the operations haven’t lived up to expectations. The Tshimbulu ZDF, as provider of security against rebel attacks in Katanga Gandajika h s and the Kasaï provinces, plays a central role in their plans. la i a b u l u Seeing China’s People’s Liberation Army (which backed the u L L Mwene-Ditu Zimbabwe African National Union during the anti-colonial K a s a Luiza war) as a model, Mnangagwa and Zvinavashe want the ZDF to i Kasai 0 Kilometres 100 have the commercial clout to match its military might. ANGOLA Plateau 050Miles Not only could the ZDF pay for its intervention in the Congo war but, they believe, it could secure major contracts and revenues from mining operations in Katanga and Kasaï. ZANU (PF) Zimbabwe Zimbabwe’s own mining sector is in decline and has much Defence Force (ZDF) spare industrial and processing capacity. So the marriage with Finance Permanent Congo could, Harare believes, give Zimbabwe’s declining Secretary Secretary, Commander Ministry of economy a substantial boost in the medium term. Outside Emmerson Defence Vitalis Mnangagwa Job Zvinavashe government circles in Harare there is much scepticism about Mutondori these plans, partly because they are cloaked in so much secrecy; Member Director Whabira it is hard to see how the public exchequer, as opposed to private individuals, might benefit. Kabila and his Minister of State, Joint OSLEG (Pvt) Ltd. De facto control Pierre-Victor Mpoyo, have been willing to hand over mineral Economic Joint Venture partner Committee concessions to the ZDF as a barter payment for its military help with ZDF but the Zimbabwean military has lacked the finance and the partner technical skills to exploit such opportunities. Joint Venture Joint Venture Technical Enter an Omani businessman, Thamer bin Saeed al partner partner Comiex- COSLEG Oryx Shanfari, who is chairman of Oryx Natural Resources. An Congo sarl Zimcon Oryx director said that Al Shanfari, a son of former Oil Minister sarl (Pvt) Ltd. Saeed bin Ahmed al Shanfari, had visited Harare 18 months ago on an Oman government trade mission. Because of his Banks with excellent English, Al Shanfari was seated next to President Majority shareholder director Mugabe and the two hit it off. Mugabe started to complain that Managing partner his country lacked the finance and technical expertise to exploit Frédéric Laurent- Joint Venture Kabasele Désiré all the Congo mining concessions that had been offered by Kabila Oryx Natural Kabila’s regime in return for Zimbabwe’s military help. Al Owns Resources Shanfari agreed to look into the matter. Africa L.L.C. Resources Banks with Ltd. Oryx is born An important midwife in the Al Shanfari-Mugabe axis was Owns Zidco Oman’s honorary consul, Kamal Khalfan, who owns (Pvt) Ltd. Chairman Owns 100% Thamer bin Zimbabwe’s only local airline catering company, Catercraft. Reverse take-over Saeed al Substantial stake Khalfan’s links to Mugabe and leaders of the ruling ZANU- Shanfari Patriotic Front date back to the 1970s when he supplied their stake guerrilla force, the Zimbabwe African National Liberation Substantial First Petra Banking Diamonds Army, with military equipment. At the time, the Sultanate of Corp. Ltd. Ltd. Oman strongly supported the Ian Smith regime and, after Zimbabwean Independence in 1980, some of Smith’s Rhodesian Managing director Special Forces officers joined the Omani Special Forces. Now CEO Non- Al Shanfari and Khalfan have become local celebrities in ruling director executive Adonis J.C. Joshi Pouroulis party circles in Harare: they both have lavish homes just outside the city and are enthusiastic sponsors of Zimbabwe’s Claims Sengamines Claims prestigious horse race competition, the Republic Cup. title to sarl title to Al Shanfari’s first big move in Zimbabwe was to form Oryx Zimcon, a joint venture with a Congo-Zimbabwe partnership.