Crisis, Capital, Compromise: Mining and Empowerment in Zimbabwe

Abstract

Introduction: Painful ParadoxesThe minerals and mining sector in Southern African has experienced a revival in the past decade, with heightened levels of international, regional and occasionally domestic investment coming in the wake of a long commodities boom, new and promising exploration, the privatisation of some state holdings and liberalisation of mining investment codes.Zimbabwe, a leading African gold and ferrochrome producer in the 1990s and home to world class deposits of platinum, relatively good infrastructure and a large pool of skills, seemed on the verge of a minerals breakthrough.Yet less than a decade later, the Zimbabwean mining sector confronts a hard reality: despite buoyant markets for minerals, with few exceptions local production fell off sharply.The collapse of production in this key sector was prevented only by a handful of new and important platinum and diamond operations -though projects in these areas, too, moved ahead slowly given high demand.The reality of a production crisis in the midst of boom times is the first of several paradoxes confronting Zimbabwean mining.A second is equally unlikely: despite the production downturn and disinvestment by several major mining houses, foreign investment into the minerals sector actually over the course of the 2000s, involving both a small number of new projects and multiple mergers and acquisitions.Indeed as the economic and political crisis deepened after 2002, the number of new players entering the troubled sector grew.A third paradox involves the nature of new market players: while government claimed to have enabled greater black empowerment (or 'indigenisation') in the sector, in practice this was rarely been achieved in the larger documented deals.Rather, empowerment has tended to feature non-Zimbabweans and especially SouthAfrica-based players.These mostly unhappy paradoxes of Zimbabwean mining are complex in their origins and closely linked with broader changing dynamics of regional cross-border investment, political power and state policy making.In each instance South African business and political actors have played prominent roles, their influence extending beyond mining into diverse sectors.Some observers argue that the worsening politicaleconomic crisis after 2000 has disproportionately benefited South African business, and see the South African government's 'quiet diplomacy' towards Robert Mugabe's ZANU-PF as an important component of a coordinated strategy aimed at enabling political hegemony and economic occupation.Others suggest that South Africa is emerging as a 'sub-imperial' power through such processes.Mainstream business analysts, too, have noted the obstacles and opportunities for capital in Zimbabwe, and acknowledge the steadfast presence of dozens of South African companies despite the deepening crisis; they recognize, too, a certain residual protection for South African subsidiaries by the possibility of appeal to headquarters in Johannesburg for political increased 1 2