BREDENKAMP CONSULTANT DISCUSSES HIS PROMINENT

C O N F I D E N T I A L HARARE 001863

SIPDIS

E.O. 12958: DECL: 08/14/2012
TAGS: ECON EMIN PINR ZI
SUBJECT: BREDENKAMP CONSULTANT DISCUSSES HIS PROMINENT
CLIENT'S BUSINESS DEAL (C-NA2-00908)

Classified By: Laboff KRBel for reasons 1.5 (b) and (d).


1. (C) On August 15, Laboff met with a local economist and
John Hollaway (protect),a Zimbabwean mining consultant, to
discuss potential economic lifelines available to the GOZ
through development of platinum resources. As expected,
Hollaway believes that any sizable expansion of the platinum
mines will depend heavily upon outside investment, which is
not very likely given the dismal investment climate as well
as the perennial rumors of nationalization/ indigenization of
the Zimbabwean mining industry. Hollaway has agreed to
facilitate a visit to one of the platinum mines for Laboff
and DCM in order to get a better feel for the situation on
the ground.


2. (C) Hollaway was returning from a trip to the Democratic
Republic of Congo (DRC),where he has been working as a
consultant for wealthy Zimbabwean businessman John
Bredenkamp, who has long enjoyed a cozy relationship with the
Mugabe government. According to Hollaway, Bredenkamp is
disenchanted with his investments in one of the world's
richest cobalt deposits located in the DRC, where he has
recently spent over US$24 million with no profit in sight.
Hollaway noted that mining is a capital-intensive, long-term
investment, which contrasts with many of Bredenkamp's other
ventures in such businesses as oil, weapons, and land, which
tend to produce more immediate profits. In a business
venture which Hollaway requested that Post keep confidential,
he is currently investigating whether a failed Zimbabwean
platinum refining unit can be retrofitted in order to refine
cobalt mined from the DRC deposit.


3. (C) Hollaway also mentioned that he had the opportunity to
speak with some of the Zimbabwean soldiers while on
assignment in the DRC. In what he characterized as "about a
dozen highly discreet conversations" with non-commissioned
officers and lower level commissioned officers, Hollaway
discerned more than a little discontent. According to
Hollaway, the soldiers expressed frustration at being used as
pawns as well as a fairly widespread lack of interest in
being Zanu-PF lackeys. Although there is extensive talk of
Zimbabwe looting the resources of the DRC, Hollaway reported
that the soldiers felt that Zimbabwe was actually being
looted instead. Timber concessions granted to Zimbabwe have
turned out to generate insignificant profits, while diamond
mine concessions have benefited only a handful of the top
military brass. While some soldiers are obtaining Zimbabwean
farms through the land resettlement program, apparently only
the higher-level officers are beneficiaries. In return,
Zimbabwean soldiers have been involved in a long-running
conflict in a far-off land while the news from home signals
repressive social legislation, political unrest and domestic
economic disaster. Hollaway acknowledged that the return of
discontented troops to a volatile domestic situation could be
problematic. In fact, he speculated that if soldier
discontent were to ripen into some sort of action, that
action will likely take the form of a junior-officer coup,
perhaps with a "sprinkling of generals" just for legitimacy's
sake.


4. (C) Comment: John Hollaway is a fairly significant mining
consultant on the regional scene who was introduced to us by
a well-respected economist. Hollaway is a second generation
white Zimbabwean who has experience in assessing deposits and
mining gold in Zimbabwe, South Africa, and Tanzania, among
other projects, and he is currently working as a consultant
with Bredenkamp and other local clients in an attempt to
increase the production of platinum from Zimbabwe. He has no
apparent axe to grind and, unlike some other white
Zimbabweans, he does not seem to be indulging in fanciful
scenarios wherein U.S. Marines ride in to the rescue. He did
not offer his observations as a method of spurring the
Western powers to action, but simply as responses to
questions about his recent work in the DRC. In fact, he was
on his way to address the Chamber of Commerce in Harare about
the "window of opportunity" which existed in the DRC mining
industry, at the request of a DRC contact interested in
luring Zimbabwean technological investment in the DRC. End
comment.
SULLIVAN