AMBASSADOR MEETS WITH ZIM MINING MINISTER

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000392 SIPDIS AF/S FOR B. WALCH DRL FOR N. WILETT ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS STATE PASS TO NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN E.O. 12958: DECL: 05/12/2019 TAGS: PGOV PREL ASEC PHUM ZI SUBJECT: AMBASSADOR MEETS WITH ZIM MINING MINISTER Classified By: Ambassador James D. McGee for reason 1.4 (b) and (d) -------------- SUMMARY -------------- ¶1. (SBU) On May 11, the Ambassador paid a courtesy call on Zimbabwe's new Minister of Mines and Mining Development, Obert Mpofu. The Ambassador pressed the ZANU-PF minister on the importance of boosting electrical supplies to support renewed economic activity and ongoing U.S. concern about violence in the Chiadzwa diamond fields. Mpofu was eager to court U.S. and western investment in the sector and disputed that there was, or had ever been, any violence in Chiadzwa. The meeting was brief and cordial, and was also attended by a representative of the Ministry of Foreign Affairs. END SUMMARY. -------------- Minister Courting Foreign Investment -------------- ¶2. (SBU) Ambassador McGee began by explaining his efforts to meet with ministers of the new government and his belief that resurrecting the mining sector was critical to turning around the Zimbabwean economy. He noted that two areas within the mining sector were of primary concern to the U.S.: Resumption of coal deliveries to the 750 MW hydro-electric plant at Kariba that is currently operating at only 50 percent capacity, and ensuring an end to violence in and around the Chiadzwa diamond fields in eastern Zimbabwe. ¶3. (SBU) Mpofu agreed on the importance of increasing mining productivity and touted Zimbabwe's rich mineral deposits in over 40 different minerals including gold, platinum, and diamonds. He cited renewed interest by foreign mining firms to invest in Zimbabwe and, without naming individual firms, broadly referred to Australian, British, and Canadian interest. According to Mpofu, the Industrial Development Corporation -- a state-owned South African development finance institution -- was investing in boosting capacity at the Kariba plant. Mpofu had also been invited to attend the International Mining in Africa conference in London on June ¶23. While banned from travel within the EU, Mpofu had been approved for a visa for the trip. ¶4. (SBU) In response to a question about local and state ownership requirements that might deter foreign investment, Mpofu said that the 51 percent local ownership requirement regarding key industries, such as mining, was "negotiable." He recognized that it was irrational to expect large foreign firms to surrender majority control and possibly even assets for little or no return. ¶5. (SBU) While discussing Chiadzwa, Mpofu maintained that only three people had died in the region. Their deaths were a result of internal disputes not involving the military or police. (NOTE: This has been the ZANU-PF position and it has been widely discredited by numerous reports from residents, NGOs, and independent press that cite the deaths of several hundred panners at the hands of state agents. END Qof several hundred panners at the hands of state agents. END NOTE.) The Ambassador challenged Mpofu to allow Embassy officials to tour the controlled-access area and Mpofu agreed to the request. Mpofu said that Chiadzwa was now under control and upon our visit we would not see any "illegal" activity there. -------------- COMMENT -------------- HARARE 00000392 002 OF 002 ¶6. (C) Mpofu is eager to bring in foreign investment and likely sees a resurrection of the mining sector as key to reviving both the economy as well as his party. With agriculture on its knees, mining is by far the largest component of national GDP and a large income generator for Zimbabwe's unity government. ¶7. (C) Mpofu's willingness to liberalize investment restrictions is encouraging. However, Mpofu is also a staunch Mugabe loyalist who benefited from war veteran and youth-directed violence and intimidation in his home district that helped him retain his seat in Parliament. It is far from clear that he would agree to genuine liberalization at the expense of ZANU-PF insiders who continue to benefit from their privileged status. END COMMENT. MCGEE