The Looting Machine
Warlords, Oligarchs, Corporations,
Smugglers, and the Theft of Africa’s Wealth
By Tom Burgis
9
Black Gold
When Nchakha Moloi was looking for a name for his mining company he settled on motjoli. In Sesotho motjoli is the word for the
leading bird in a V-shape formation, guiding the others toward their destination. Moloi had grown up in QwaQwa, a homeland beside the Drakensberg mountains of central South Africa to which the apartheid regime
consigned Sesotho-speaking blacks. There were no mines in QwaQwa,
but the menfolk would disappear for months on end to the mines of the
Witwatersrand, under which lie the seams that have yielded a third of the
gold mined worldwide over the past 150 years, returning only at Easter and
Christmas to spend their wages.
Moloi took up one of the few places the authorities allotted for black
students, at the prestigious University of the Witwatersrand in Johannesburg, to study medicine. But he found cutting up cadavers too gruesome
and decided to switch subjects. He had never heard of geology, but once
university staff told him that it addressed “all the big questions” he was
hooked. He studied the nature of the Earth out of fascination rather than
any grand design for a career, but after graduation Moloi went to work as
a prospector for Anglo American, the mining house that Ernest Oppenheimer had founded in 1917, which had grown to become the world’s biggest mining conglomerate. After a while Moloi moved to the Oppenheimer
family’s diamond company, De Beers.
As they bumped around the diamond fields in their pickup truck, the
members of Moloi’s team paid little heed to the different colors of their
skin. But when he went to De Beers’s head office to make his reports,
Moloi was subjected to the indignities apartheid imposed on black South Africans. He still recalls the strictures: “They can’t come here, they can’t
go there. You get offended.”1
Ignoring his bosses’ objections, Moloi joined
the National Union of Mineworkers, a bulwark of resistance to apartheid.
His relationship with De Beers soon soured, and he took a job at Rio Tinto,
working on a copper mine close to the Kruger National Park, where the racial division was even more apparent. “I was working on the mine, in production, and I was really exposed to how things are,” Moloi remembers.
By 1990 mass protests and international sanctions had brought the
apartheid regime to the verge of collapse. F. W. de Klerk released Nelson Mandela and lifted the ban on the African National Congress. The
party set up working groups to prepare itself for government, and Moloi
joined the one on science and technology. By 1993 the leading lights of the
ANC’s economics team had identified the usefulness of a man who knew
the mining business from the inside. Moloi was brought onto the party’s
economic planning team as it made ready to face sky-high expectations of
black South Africans, many of whom believed that their imminent liberation would bring swift deliverance from poverty. After the triumph of Mandela and the ANC in the 1994 elections, Moloi was deployed to various
senior positions in the mining ministry. A decade later he founded Motjoli
Resources and took his place among the generation of black entrepreneurs
seeking to do to a mining industry still predominantly in white hands what
the ANC had done to politics—wrest control from the minority and enfranchise the black majority. But as Moloi discovered, looting machines are
not so easily supplanted.
From the country’s birth, South Africa’s white rulers relied on income from
exports of minerals, primarily gold. In 1912, the year when the forerunner
to the ANC was formed to press for black rights, gold and diamonds accounted for 78 percent of exports. Manufacturing developed, but throughout the apartheid decades South Africa remained a resource economy. The
relationship between the English-speaking tycoons who controlled the biggest mining companies and the Afrikaner politicians who ran the apartheid
system was at times uneasy, but they reached an accommodation that kept
racist rule in place and secured the flow of cheap black labor to the mines.
In 1970, the year the Olympic movement expelled South Africa, the
government passed legislation formally stripping blacks of their citizenship and restricting them to destitute “homelands,” and the authorities
appointed a barbaric new commanding officer at Robben Island prison to
watch over Mandela and his fellow inmates, South Africa produced some
62 percent of the gold mined worldwide. From the early 1970s to 1993 gold,
diamonds, and other minerals accounted for between half and two-thirds
of South Africa’s exports annually.2
South Africa’s gold and diamonds provided the financial means for
apartheid to exist. In that sense white rule was an extreme manifestation
of the resource state: the harnessing of a national endowment of mineral
wealth to ensure the power and prosperity of the few while the rest are
cast into penury and impotence. None of Africa’s resource states today
come close to the level of orchestrated subjugation of the majority that
the apartheid regime achieved. Neither do they employ apartheid’s racial
creed, even if ethnicity has combined poisonously with the struggle to
capture resource rent in Nigeria, Angola, Guinea, and elsewhere. But as
their rulers, in concert with the multinational corporations of the resource
industry, horde the fruits of their nations’ oil and minerals, Africa’s resource states have come to bear a troubling resemblance to the divisions
of apartheid.
While the children of eastern Congo, northern Nigeria, Guinea, and Niger waste away, the beneficiaries of the looting machine grow fat. Amartya
Sen, the Nobel Prize–winning Indian economist who has examined with
great insight why mass starvation occurs, writes, “The sense of distance
between the ruler and the ruled—between ‘us’ and ‘them’—is a crucial feature of famines.”3
That same reasoning could be applied to the provision
of other basic needs, including clean water and schooling. And rarely is the
distance Sen describes as wide as in Africa’s resource states.
Many of Africa’s resource states experienced very high rates of economic growth during the commodity boom of the past decade. The usual
measure of average incomes—GDP per head—has risen. But on closer examination such is the concentration of wealth in the hands of the ruling
class that that growth has predominantly benefited those who were already
rich and powerful, rendering the increase in GDP per head misleading. A more revealing picture comes from a different calculation. Each year the
United Nations ranks all the countries for which it can gather sufficient
data (186 in 2012) by their level of human development, things like rates
of infant mortality and years of schooling. It also ranks them by GDP per
head. If you subtract a country’s rank on the human development index
from its rank on the GDP per head index, you get an indication of the extent to which economic growth is actually bettering the lot of the average
person in that country. In countries that score zero—as Congo, Rwanda,
Russia, and Portugal did in 2012—living standards are roughly where you
might expect them to be, given that country’s GDP per head. People in
countries with positive scores enjoy disproportionately pleasant living
conditions relative to income—Cuba, Georgia, and Samoa top the table
with scores of 44, 37, and 28, respectively. A negative score indicates a failure to turn national income into longer lives, better health, and more years
of education for the population at large. Of the ten countries that come out
worst, five are African resource states: Angola (–35), Gabon (–40), South
Africa (–42), Botswana (–55), and Equatorial Guinea.4
Equatorial Guinea’s score (–97), comfortably the worst in the world,
is all the more remarkable because its GDP per head is close to $30,000
a year, not far below the level of Spain or New Zealand and seventy times
that of Congo.5
For a tiny nation of seven hundred thousand people, you
might expect that to mean widespread prosperity. But the economy is
acutely concentrated on oil, which accounts for 75 percent of GDP and 90
percent of government revenue. Oil sales generate 98 percent of exports, a
figure only slightly higher than the share of the vote that Teodoro Obiang
Nguema, president since 1979, usually secures in sham elections. His son,
Teodorin Obiang, officially received only a modest salary for the ministerial
positions he has held but has nonetheless been the proud owner of a $30
million mansion in Malibu, properties in Cape Town and the Avenue Foch
in Paris, a fleet of Ferraris and Rolls Royces, a Gulfstream jet, paintings
by Renoir and Matisse, and one of Michael Jackson’s crystal-encrusted
gloves.6
The rest of Equatorial Guinea endures living standards ranked 136
out of 186 countries, behind Guatemala (GDP per head: $5,000), and has
the same life expectancy, fifty-one years, as Somalia. The average length of
schooling is eight years, about the same as in Afghanistan.
Mining was always going to be central to the ANC’s plans to redress the
economic injustices of apartheid—an experiment in whether South Africa
could break the link between resource wealth and extreme inequality. The
industry had served both as the test tube for apartheid policies and the
breeding ground of resistance to white rule.
The ANC inherited a country in which the mining industry, like the rest
of the economy, was controlled by a white minority that had surrendered
political but not commercial hegemony. The new government’s solution
was a policy called Black Economic Empowerment, or BEE, under which
the owners of South Africa’s biggest companies would transfer a chunk of
their shares to blacks and other previously disadvantaged ethnicities. The
owners would lend the buyers money to finance the purchase of the shares,
to be repaid from future dividends. The idea was to transform South Africa’s economy to reflect the rainbow nation it aspired to be. The reality,
however, has been different. “Most people are fully supportive of the need
for an ambitious transformation agenda,” Martin Kingston, the head of the
South African office of the investment bank Rothschild’s and one of Johannesburg’s most influential and well-connected bankers, told me.7
“But
it’s been flawed in design and implementation, and it’s been abused. There
was an expectation that BEE would be a panacea for impoverished black
South Africans. It has not been. Some have benefited, but they are at the
top, not the bottom.”
The volatility of the Johannesburg Stock Exchange played havoc with
BEE deals. Many black investors got burned as falling share prices left
them struggling to pay for the stock they had acquired in empowerment
transactions. But there were some who profited spectacularly—in particular, a handful of black men who combined a sense for business with impeccable connections to the ruling party.
Patrice Motsepe, an astute former lawyer with family ties to the ANC
who founded African Rainbow Minerals, became South Africa’s first billionaire. Tokyo Sexwale, whose charisma helped him make a seamless
transition from freedom fighter to mining mogul, gained a foothold in the
platinum industry and expanded into other sectors and beyond South
Africa’s borders before returning to government as housing minister in
2009. Cyril Ramaphosa’s journey was the most remarkable of all. As the tenacious young leader of the National Union of Mineworkers, he led the
strikes in the 1980s that struck at the heart of the apartheid economy, and
as secretary general of the ANC he played a central role in the negotiations
with the National Party that averted civil war and led to the free elections
of 1994. Ramaphosa won a reputation for fearlessness and integrity. Then,
after he lost out to Thabo Mbeki in the race to succeed Mandela as president, he switched from politics to business. He struck the first big BEE
deal, becoming chairman of an Anglo American subsidiary. The transaction fared badly, but other deals followed, and Ramaphosa went into
business with Glencore, the Swiss commodity trading house. His fortune
made, Ramaphosa, like Sexwale, returned to politics, becoming the deputy leader of the ANC in 2012 and, following the 2014 elections, deputy
president of South Africa.
Nchakha Moloi was never ANC royalty like Ramaphosa or Sexwale.
Nonetheless, Motjoli Resources made headway through BEE deals, especially in coal. When we met at a sushi restaurant among the smart malls of
uptown Johannesburg in 2013, Moloi, though past fifty, was dressed more
like a Silicon Valley entrepreneur than the double-breasted executives of
mining boardrooms. He wore a red baseball cap, a G-Star Raw T-shirt, and
a funky watch.
Moloi was eyeing up new opportunities in iron ore, another metal abundant in South Africa’s cornucopia of minerals, but he acknowledged that
BEE had proved badly flawed. Black ownership of the mining industry
was still “miniscule.”8
Many of BEE’s beneficiaries had been content to
receive a share of revenue from preexisting mines rather than investing in
digging their own ones.
“It’s very hard because the stage was set before black people came into
the mining industry,” Moloi told me. The white barons of South African
mining had clung to the choicest cuts, he maintained. “The resources, the
best of the best have been carved up. Whatever was left that was good, they
kept it for themselves. The world-class deposits are kept by the historical
owners, and they have created conditions of entry for black people. They
said, ‘You can come in at 26 percent; we will determine the cost of finance,
when the interests vest, the value.’ In terms of world-class deposits in South
Africa, there’s no chance of black people getting in—just the remnants.”
Perhaps he overstated his case—Patrice Motsepe, for one, has acquired
some plum assets—but the argument carries weight. First the colonialists
and then the apartheid regime carried off the cream of South Africa’s natural wealth. South Africa’s mineral resources are still by far the world’s most
valuable, estimated at $2,494 billion, way ahead of second-place Russia
and enough money to buy Apple, Exxon Mobil, and the rest of the nine
biggest listed companies in the world.9
But by the time black South Africa
came into its inheritance, mining output was slowing, many of the richest
remaining seams lay dangerously deep underground, and the industry’s
money men were wary of investing in a country run by a party with a socialist tradition.
Handing a slice of the mining industry to Ramaphosa, Sexwale, and
the rest helped to create a class of black South African tycoons. Only the
churlish would deny that many of them had made great sacrifices for their
compatriots’ freedom. Perhaps, as their admirers suggested, they gave
other black South Africans something to aspire to. But Black Economic
Empowerment does nothing to change the fundamental structure of the
mining industry, one that channels rents narrowly to those who control
it, whatever the level of melanin in their skin. Conditions for the average
mine worker remained grim while the new black moguls dreamed, as Tokyo Sexwale told his aides, of becoming “the first black Oppenheimer.”10
Apartheid in South Africa was racial in philosophy and spatial in execution.
Whites had their cities and their ranches; black, Indian, and mixed-race
people were consigned to urban ghettos and rural “homelands.” Men
from the homelands, or “Bantustans,” were carted off to the mines, where
their movement was tightly controlled. The townships beside the cities
were meant to be close enough to supply whites with black labor by day
but also sufficiently distant to allow them to sleep soundly in their beds at
night.
Nowadays the inequity that has outlived apartheid is most apparent in
South Africa’s urban geography. The extraordinary women who work in
the Leratong Joy for One AIDS orphanage in Alexandra, a particularly
tough township that lies on what must be one of the most stark economic fault lines anywhere, can see the glittering towers of the corporate headquarters and exclusive hotels of Sandton, the business district a few hundred meters to the east. The sight of the orphans—some of whom did not
yet know they had the virus that had killed their parents and none of whom
could yet grasp how poor were the cards South Africa’s inequitable economy had dealt them—belting out “If you’re happy and you know it, clap
your hands!” is one of the most heartbreakingly ironic things I have ever
seen.
Under apartheid, when whites made up at most 20 percent of the population, they garnered between 65 and 70 percent of the national income. In
2009, fifteen years after Mandela became president, the richest 20 percent
of South Africans garnered 68 percent of the national income; the figure
reached 70 percent in 2011.11 By some measures the gap between rich and
poor has widened since the end of apartheid.12 That is the legacy of apartheid-era urban planning, two-tier education, and countless other lingering
distortions of white rule. But it also fits the pattern of inequality that stems
from the resource curse.
When the simmering rage of black South Africans who were still barely
scraping by after two decades of majority rule finally exploded, the detonation came, inevitably, at a mine. Marikana lies on the Bushveld Complex,
a vast, subterranean saucer of minerals that contains by far the planet’s
largest stocks of platinum. In August 2012 miners launched wildcat strikes.
They demanded that Lonmin, the mine’s London-listed owner, which enjoyed the backing of the IFC, grant them a hefty pay raise.
Many of the miners lived in informal camps beside a mine that private
guards with shotguns patrolled, their shared toilets a humiliating contrast
to the high-tech facilities used to extract ore. In the buildup to the strike new
currents of radicalism had emerged. The National Union of Mineworkers
had been a decisive force in the struggle against apartheid, but large numbers of miners believed it had grown too close to the ANC government
and the Lonmin management. They had decamped to its militant rival, the
Association of Mineworkers and Construction Union. There were violent
clashes between members of the two unions and between strikers and security forces. Cyril Ramaphosa, the former NUM leader who had grown
rich through BEE mining deals and sat on Lonmin’s board, described the unrest as “plainly dastardly criminal” and urged the police to act.13 The
tension mounted. On August 16 armed police opened fire on the strikers.
They killed perhaps a dozen miners instantly. Others, as the South African
photojournalist Greg Marinovich painstakingly established, were executed
nearby.14 In all, thirty-four miners died. It was South Africa’s bloodiest day
since the end of apartheid.
The strike and its consequences triggered national soul searching.
“The Marikana phenomenon,” declared Mamphela Ramphele, a doctor,
academic, and former anti-apartheid activist, “is a logical outcome of an
extractive industry model, where people could walk past shacks of the very
people who are producing the platinum that makes them so fabulously
rich, without thinking something is remiss.”15
Marikana laid bare that which has not changed—or at least, not changed
quickly enough—since the end of apartheid. It gave grist to the arguments
of those seeking to overturn Mandela’s vision of a “nonracial” society, such
as Julius Malema, the firebrand former head of the ANC’s youth league
who combined choruses of “Shoot the Boer” with calls for the nationalization of the mining industry. For those who pondered it soberly, though,
Marikana revealed something that was not necessarily about race at all but
about the curse of natural resources.
South Africa is in many ways different from the continent’s other resource states. Its economy is more sophisticated, and its institutions have
generally proved more resistant to political manipulation. But there are
troubling parallels between South Africa and Angola, Nigeria, and the
other African nations that oil and minerals have ruined. “Where there is an
asymmetrical concentration of political and economic power, the resource
economy on the African continent often falls prey to a narrow, extractionist elite whose outlook, despite its democratic pretentions, is feudal, and
its behavior more similar to old tribal chiefs than modern government,”
Songezo Zibi, who worked in public relations for the mining house Xstrata
before becoming one of South Africa’s most incisive commentators and
the editor of the authoritative Business Day newspaper, told me.16
The embodiment of that chiefly style of rule in South Africa today is
Jacob Zuma. His folksy charm and populist touch have kept him afloat
through a succession of corruption scandals. In March 2014 he won a second term as president—although the ANC’s majority decreased. Two
months before the election South Africa’s corruption ombudsman found
Zuma guilty of misconduct over $20 million of improvements to his private
residence at Nkandla, the president’s birthplace in the Zulu heartlands.17
The improvements, ostensibly to upgrade security at the residence, included a swimming pool, a chicken run, and an amphitheater. Some of the
money spent on the Nkandla residence was diverted from the Department
of Public Works’ budget for inner-city regeneration, the body charged with
remolding the physical legacy of apartheid.
South Africa aspires to be part of the vanguard of a new world order. Alongside Brazil, Russia, India, and China, it belongs to the so-called BRICS
nations, a grouping of fast-growing industrial economies that began as an
acronym of the five countries, coined by the Goldman Sachs economist
Jim O’Neill, and has evolved into a club that has its own summits and, as
of 2014, its own bank, a counterweight to the World Bank and the IMF.
At the BRICS summit in Brazil in July 2014, Zuma told his fellow heads
of state that he recognized that the South African economy “needs to be
more inclusive, more dynamic, with the fruits of growth shared equitably.”
If Zuma is sincere in that endeavor, he will need to break the spell of southern Africa’s stupendous natural riches, which have brought violence and
dispossession ever since an English vicar’s son called Cecil John Rhodes
first set foot in the diamond fields of the Highveld.
10
The New Money Kings
Robert Mugabe had a serious problem. Hunger was rife in what had
been, in the early years of his rule, a relatively prosperous nation, and
cholera was spreading rapidly. Zimbabwe’s currency was worthless. But
the most pressing difficulty, as far as the eighty-four-year-old president
was concerned, was political. In March 2008 the usual tactics of Mugabe
and his Zanu-PF party—trumpeting his record as a hero of African liberation while intimidating the opposition and rigging the vote—had failed to
deliver the usual resounding victory in presidential elections. In the first
round of voting Morgan Tsvangirai, a former mineworker who had risen
through the union movement to become the head of the opposition, had
beaten him into second place. Tsvangirai pulled out of the runoff after a
campaign of violence against his supporters, and Mugabe’s coronation as
the victor had been such a naked fraud that regional leaders forced their
elder statesman to submit to a coalition government with his rival. “Robert
Mugabe’s world,” wrote his biographer, Heidi Holland, “was constructed
from his delusions of omnipotence.”1
Now, after steadily gathering power
unto himself since the end of white rule in 1980, he had been forced to
share it.
Once unthinkable, calls from within Mugabe’s own party for the old
man to step aside were growing louder. Most urgently Mugabe needed
cash to ensure that the security forces, the foundation of his regime, remained loyal. Under the power-sharing deal Mugabe’s Zanu-PF had kept
control of the security apparatus but had surrendered the finance ministry to Tsvangirai’s Movement for Democratic Change. To compensate for losing direct access to the treasury, the aging autocrat required some
off-budget funding. He lost little time.
Shortly after dawn on October 27 the residents of Chiadzwa, a town
close to the high peaks that mark Zimbabwe’s border with Mozambique,
heard the sound of rotor blades. Five military helicopters buzzed into view
and began spraying bullets and tear gas.2
Army trucks disgorged eight
hundred soldiers, who chased those who fled into the hills, firing their
assault rifles indiscriminately. Operation No Return had begun.
Chiadzwa’s misfortune was to lie on one of the world’s greatest untapped
repositories of diamonds. For many years the Marange area’s inhabitants
had thought little of the sparkling flecks in the earthen walls of their houses.
De Beers had prospected the site in the 1990s but turned its attention elsewhere. From around 2006 local villagers started to realize that Marange
was awash with alluvial diamonds, stones that have been dislodged from
the subterranean volcanic pipes in which they formed and deposited on
the surface. Fortune seekers from across the land descended on the Marange fields, panning for stones by day and bedding down in the bush at
night. A superstition took hold among miners that a death would bring
diamonds—collapsing ground could prove fatal for the unfortunate miner
standing on it but would often expose a fresh trove of precious stones.
In a country where Mugabe’s program of farm seizures had contributed
to the collapse of a flourishing economy, where even the central bank’s
massaged version of the inflation rate was above 2 million percent, diamonds offered a ready way to make some dollars or South African rand
from the South African and Lebanese traders and smugglers who sprang
up as the diamond rush gathered steam. The police brutally ensured they
got their cut. For a while it suited Mugabe to let the free-for-all continue. At
the peak of the rush thirty-five thousand miners were working the fields.3
But then circumstances changed. With Tsvangirai as prime minister and
the finance ministry in the MDC’s hands, Mugabe’s shadow state could no
longer rely on looting the treasury directly. His eyes turned to the diamond
fields.
For three weeks the armed forces pummeled Marange. The bodies of
many of the two hundred and fourteen miners who died were consigned to
mass graves. Survivors were ordered to pitch tents for the soldiers, even to
sing for them. “Marange has become a zone of lawlessness and impunity,” concluded researchers from Human Rights Watch who conducted more
than a hundred interviews in Marange in the aftermath of Operation No
Return, “a microcosm of the chaos and desperation that currently pervade
Zimbabwe.”
Before long, obscure companies with links to Mugabe’s security forces
were being awarded concessions to mine diamonds at Marange.4
Annexing
the diamond fields had the added bonus of starving the MDC-controlled
finance ministry of funds, helping to make its already improbable task of
reviving the Zimbabwean economy next to impossible and undercutting
its credibility as a party that could govern effectively. Measured by carats, Zimbabwean diamonds accounted for 9 percent of the world’s supply
in 2012. Its reserves, estimated at 200 million carats, were the largest anywhere outside Russia.5
But only about 10 percent of the $800 million in
revenues from official exports of Zimbabwean diamonds between 2010 and
2012 found their way to the treasury, despite the Zimbabwean state owning large stakes in some of the mining ventures.6
Tendai Biti, the MDC’s
brightest strategist who became finance minister in the power-sharing government, said what everyone suspected: “There might be a parallel government somewhere in respect of where these revenues are going.”7
That parallel government, like the shadow states of Joseph Kabila in
Congo or the Futungo in Angola, had secured off-the-books funding from
Zimbabwe’s natural resources. As the 2013 elections approached, Mugabe was determined not to repeat the mistakes of 2008. With the diamond
fields firmly in his grip, he set about planning to use them to recapture
absolute power.
In July 2013, days before the election I drove over the heights of Christmas
Pass and headed down toward the dusty plains of the Marange diamond
fields. I stopped off at the newly built settlements to which former residents of the mining areas had been forcibly relocated, exchanging under
duress their communities and grazing lands for scrubby plots and isolation
that cut their income and forced them to pull their children out of school.
At the checkpoint guarding the entrance to the mining zone I attempted to
assume the bearing of a foreign diamond trader not to be messed with and
passed through, enduring only some probing glances.
Msasa trees, with their beanpole trunks, stood sparsely between the
boulders, offering a modicum of shade for the longhorn cattle. At a half built hangout on the fringes of the mining zones miners told me tales of the
frenzied diamond rush. One remembered ruefully how he found a clear,
high-quality, five-carat diamond but parted with it for only a thousand dollars because he had not then known that that was a mere fraction of its
value. There was boozing and violence on the fields: miners could make
princely wages compared with the average Zimbabwean’s fast-dwindling
income, even after they had paid off the soldiers. But there was little to
show for the sacks of precious stones that had departed. A stretch of tarmac road next to where we were speaking abruptly gave way to a dirt track.
Trymore, who asked me not to use his family name, came down from
Harare to his home village in the diamond fields a few months before Operation No Return. Some days he found nothing; on others he might make
$700. The police used to hassle the miners, but it was nothing compared
with what followed once the military took control and brought in the mining companies.
One day, Trymore told me, his brother had been cleaning out the village
well when private security guards from one of the mining companies confronted him. They accused him of mining illegally and took him to a place
whose name brought a shudder from everyone in Marange who uttered
it: the Diamond Base. At the time the base was located close to Trymore’s
village. (It was subsequently moved to a hilltop, a piercing eye surveying
all those below.) The base housed soldiers and military police. Terrible
stories spread about what happened within, of people being rolled in ashes
and ordered to beat one another. “They will do anything there,” a human
rights activist in Marange told me. “There are no records. A lot of people
have never come out.”
With his eyes fixed straight ahead, Trymore recounted what he had
been able to discover about his brother’s final hours at the Diamond Base.
He was beaten so savagely that he had been vomiting and shitting blood
before he died.
Trymore stopped speaking. The only sound was the scrape of a bricklayer’s trowel nearby. Trymore was an MDC supporter, and the half-formed
building where we were sitting was taking shape as a bar for opponents of the regime. The proprietor swept in, a hefty ball of energy called Shuah
Mudiwa. Mudiwa was jovial despite being in the thick of a perilous task:
trying to win reelection as the MDC MP for the area. He had been arrested
the previous day for staging an unsanctioned rally.
Mudiwa told me he believed diamond money was paying for Zanu-PF’s
campaign regalia, adding that the MDC wanted to cancel all the mining
companies’ contracts if, as many of its supporters earnestly believed in
those final days before the poll, the party was finally on the verge of shunting Mugabe aside.
But they had underestimated their opponents. Perhaps the MDC’s
lackluster performance in the coalition government would have dented its
support in a free vote, but Zanu-PF had no intention of leaving the allocation of power to the whims of voters. According to local election monitors,
more than 750,000 voters in towns and cities, the bedrock of MDC support, had been left off the electoral roll.8
The MDC had been prevented
from examining the roll, and more than a million excess ballots had been
printed. Some 300,000 voters were turned away from polling stations on
election day, and another 200,000 were “assisted” in casting their ballots.9
The margin of Mugabe’s victory looked resounding—a 61 percent share
of the vote—but the 940,000 votes by which he beat Tsvangirai were well
within the tally of dubious ballots. Tsvangirai called the results a “massive
fraud,” but there was no hiding the fact that his old foe had comprehensively outflanked him.
Shuah Mudiwa would lose his seat as Zanu-PF claimed a two-thirds
majority in Parliament. Before he bustled off for a final few laps of the campaign trail I asked him about one of the lesser-known companies doing
business in the Marange fields, which I had heard was linked to the Central Intelligence Organisation, Mugabe’s secret police. “It’s the military of
China and the CIO,” Mudiwa said. “They are trading diamonds.”
The company was called Sino Zim Development. It was part of the
Queensway Group.
The terrorizing of Marange is only the latest chapter in the sorry history of
African diamonds. The discovery of diamonds in the center of what would become South Africa in the 1860s marked the start of industrial diamond
mining, the excavation of underground pipes formed by cooling magma
that contain the nuggets of crystallized carbon that have bewitched mankind since antiquity. Until the 1930s South Africa accounted for virtually
the world’s entire supply of rough stones. New discoveries elsewhere in
southern Africa followed—in Namibia, Angola, and Congo—then in west
Africa.
In recent decades the trade has broadened, as Russia, Canada, and Australia also became important sources of stones. But Africa still accounts
for well over half of the global rough diamond supply.10 Its most famous
stones grace the temples of power. The Star of Africa, cut from the Cullinan diamond, the largest ever found at more than three thousand carats,
is mounted on the Sovereign’s Sceptre in the British Crown Jewels, kept
at the Tower of London. (Like many African diamonds since, the Cullinan
left the continent through subterfuge. After its discovery in South Africa
in 1905 it was sent to Britain as a gift for King Edward VII. The heavily
guarded steamer ostensibly carrying the stone was a decoy designed to
hoodwink potential thieves; the diamond itself went by registered post.)
Other celebrated African stones have fetched tens of millions of dollars at
auction and reside in private collections. A few sit in the Smithsonian, the
museum between the US Capitol and the White House in Washington.
Against the beauty of Africa’s diamonds glares the ugliness of what they
have been used to do. In recent decades diamonds have provided the funds
that sustained two of the continent’s most horrendous wars.
When the collapse of the Soviet Union brought an end to the Cold War,
factions in proxy conflicts that had relied on the financial support of one of
the two superpowers suddenly found themselves in need of new sources
of cash to buy weapons. In Angola José Eduardo dos Santos’s Communist
government controlled the coast: it could rely on oil from the Cabinda enclave that then produced most of the country’s crude as well as the flourishing new reserves offshore. Inland, Jonas Savimbi’s Unita rebels turned
to the diamonds strewn under their territory in the Angolan interior. Diamond sales brought in $700 million a year for the rebels through the 1990s,
when both sides increased the ferocity of their campaigns following Savimbi’s rejection of a 1992 election that was meant to bring peace. Hundreds
of thousands died; entire cities were destroyed.11
In 1998 the United Nations imposed sanctions on Unita’s diamond
sales. But diamonds lend themselves to smuggling—a single half-decent
gem can fetch as much as several tons of iron ore. Unita’s exports were not
curtailed, merely inconvenienced. Traders simply carried the stones across
the border and declared them to be Congolese or Zambian. From there
they would flow to Antwerp or other centers of the rough diamond trade
and were again sold on, chiefly to De Beers, then still a cartel that controlled 80 percent of the world trade in rough diamonds.12 Cut, polished,
and mounted, the diamonds would end their journey on the earlobes and
ring fingers of the wealthy and the amorous.
The notion of a “blood diamond” strengthened as consumers came to
realize that beautifying their hands came at the cost of African limbs. In Sierra Leone rebels under the tutelage of Charles Taylor, a warlord in neighboring Liberia, severed hands and feet as they waged a campaign devoid
of any cause beyond amassing power and wealth. From the time of its formation in 1991 the principal goal of the Revolutionary United Front and its
army of child soldiers was to maintain control of Sierra Leone’s diamond
fields, channeling the stones into Liberia for export to the world market.
For a decade government troops, rebels, and a regional Nigerian-led force
vied to outdo one another with the scale of their violence and looting. All
the while the diamond trade dripped fuel into the conflict. As in Angola,
when the United Nations imposed an embargo on diamonds from Sierra
Leone in 2000, the stones flowed out through Taylor’s Liberia instead,
where declared exports far exceeded domestic production.13 One lawyer
in Freetown, Sierra Leone’s bullet-ridden capital, said, “It is strange to say
but I believe that without diamonds this country couldn’t have been in this
state of exploitation and degradation.”14
A British military intervention in 2000 helped to end Sierra Leone’s
war. Two years later, in Angola, when government troops hunted down Jonas Savimbi and killed him, there was the prospect of lasting peace for the
first time since independence in 1975. The same year, the public tarnishing of the resource industry’s most illustrious commodity gave rise to the
first international mechanism designed to break the link between natural
wealth and bloodshed.
Campaigners from Global Witness generated such outrage with their investigations of the links between diamonds and war that De Beers’s claims that it had ceased to buy blood diamonds were insufficient to prevent more
concerted action. The Kimberley Process, named after the South African
mining town that was the scene of the first mining rush in the 1870s, was
designed to stop rebel movements like Unita and the RUF from selling
diamonds into the world market, either directly or via neighboring states,
by ensuring that every rough stone carried a certificate of origin. Drawing
together governments, campaign groups, and companies that mined and
marketed diamonds, the Kimberley Process was voluntary and often fractious. But its membership grew until it accounted for 99.8 percent of the
diamond trade.15
The Kimberley Process helped to stem the flow of blood diamonds, but
it had a glaring flaw. Its chief targets were rebel movements. Governments
that broke the rules were occasionally sanctioned—and risked losing the
premium that came with Kimberley certification—but even atrocities such
as those that Mugabe’s security forces perpetrated at Marange were not
enough to consign a country to the blacklist. In 2011, after the Kimberley
Process agreed to certify Zimbabwe’s diamonds, Global Witness withdrew
in disgust from the organization it had helped found. “It has become an
accomplice to diamond laundering—whereby dirty diamonds are mixed
in with clean gems,” said Charmian Gooch, one of the group’s founding
directors.16
Even where a local diamond industry has been managed in exemplary
fashion, the vagaries of operating at the lowest rung of the resources industry can be as severe as in countries supplying less glamorous fare like iron,
copper, or crude oil. Botswana, where diamonds account for three-quarters
of exports, is a rare example of an African state that is rich in resources but
has not succumbed to war and grand corruption. In part that is because
it is so small—the population is 2 million people, fewer than all but five
countries of the African mainland—and relatively ethnically homogenous.
It was one of the earliest southern African nations to gain independence, in
1967, and had its own functioning institutions in place by the time two gargantuan diamond mines were discovered, helping the government drive a
hard bargain with De Beers. Botswana enjoys peace and living conditions
that are much better than those of most other Africans. The government
has taken a stake in De Beers and forced the company to move some of its cutting and polishing operations to Botswana, part of a concerted effort
to begin the long journey from resource economy to industrialization. Yet
when the global financial crisis caused demand for diamonds to seize up in
2008, Botswana was reminded of its economic fragility. The United States,
which accounts for half of the world’s diamond sales each year, slipped
into recession, causing diamond prices to tumble.
“There is no doubt we are facing a huge challenge,” Ian Khama, Botswana’s president, told me in March 2009.17 “The main reason is because
we have been very dependent on revenues from minerals, especially diamonds, ever since they were found in the seventies.”
When I turned up at Jwaneng, the De Beers mine in southern Botswana rated as the most valuable on the planet, the scene was a far cry
from the Hollywood bash hosted by Khama’s predecessor as president a
few weeks earlier—in the resplendent company of the supermodel Helena Christensen, the actress Sharon Stone, and the burlesque starlet Dita
Von Teese—to try to speed the resuscitation of the diamond industry on
which his country depends.18 The rickety dwellings of the informal settlement that had grown up around the mine were emptying out. De Beers
had decided to mothball the mine until the world economy picked up and
demand for diamonds returned. The mood in the shebeens, the unlicensed
drinking dens selling potent brews and sorghum beer, was grim. “I came
here as a boy,” Edwin Phaladi, a fifty-two-year-old cobbler, told me. “Now
I’m going back to my village.”19
No matter whether they are trading in copper or gold or natural gas, repressive regimes need middlemen to turn their control of resources into
money. The diamond industry is peculiarly closed and complex, however, with stones sold either under long-term contracts or at private auctions, their value determined by gauging the aesthetics of refracted light
or the relative merits of a hint of pink to a tinge of yellow. The barons of
the diamond trade rank among the most powerful figures in the African
resource game. Dan Gertler, whose grandfather founded Israel’s diamond
exchange, got his start in Congo by winning a diamond monopoly in exchange for funds to help arm Laurent Kabila’s forces. Long before the The Looting Machine
scandal over payments to the wife of a Guinean dictator cost his mining
company its multibillion-dollar iron ore rights in Guinea, Beny Steinmetz
had expanded the family diamond business into the biggest supplier to De
Beers and had struck a deal to provide gems from postwar Sierra Leone
to Tiffany’s. (Steinmetz’s marketing strategy includes furnishing Formula
One cars with steering wheels encrusted with diamonds, a touch that adds
“a real bit of bling to the cars,” according to one of the lucky drivers, Lewis
Hamilton.20)
Lev Leviev, the third kingpin of African diamonds, is, like Steinmetz and
Gertler, a billionaire and a citizen of Israel, one of the three centers of the
diamond trade alongside Belgium and India. Unlike his two compatriots,
however, Leviev was not brought up in one of the great diamond families. He was born in Uzbekistan, then still a Soviet satellite, before moving
with his Jewish parents to Israel as a teenager. Penniless but ambitious—“I
knew from the time I was six that I was destined to be a millionaire,” he has
said—he left school and began an apprenticeship in the diamond trade,
learning the art of cutting and polishing stones.21 But the best rough diamonds were reserved for the privileged “sightholders” anointed by De
Beers. Leviev muscled his way into that club—then took on the cartel. First
in Russia, then in Angola, he went directly to the authorities, bypassing
De Beers. No one had attempted so bold a challenge before, and Leviev’s
audacity started to loosen De Beers’s stranglehold on the industry.
When Leviev arrived in Angola in the mid-1990s the war was entering
its final stages. He co-founded a company to buy Angolan stones and secured an 18 percent stake in Catoca, a choice diamond prospect in territory that the government had, by the time mining began in 1998, reclaimed
from the rebels. It would become one of the world’s great mines.22
Having elbowed out De Beers, Leviev was made. His cutting and polishing operation became the world’s largest.23 He built a business that ran
the length of the diamond trade, from mines in Angola, Namibia, and elsewhere to jewelry stores on Bond Street and Madison Avenue. Africa-Israel,
a sprawling multinational conglomerate listed in Tel Aviv of which Leviev
took control in 1996, has dabbled in everything from bikinis to US petrol
stations to the construction of Israeli settlements in occupied Palestinian
territory.24 A devout adherent of the Chabad, a fundamentalist branch of Judaism, Leviev ploughed part of his fortune into advancing the cause,
building schools and synagogues and orphanages in Russia and beyond.
For himself, he built a $70 million mansion in the exclusive north London
enclave of Hampstead, complete with movie theater, swimming pool, and
an armor-plated front door behind which he, his wife, and two of his nine
children took up residence in 2008.25
Following the September 11 attacks in New York in 2001, Leviev
snapped up bargain stakes in the New York Times Building, Madison Avenue’s Clock Tower, and other downtown Manhattan real estate he planned
to convert into luxury condominiums. When the financial crisis struck in
2007, the properties’ values collapsed along with the rest of the US real
estate market. Leviev had borrowed heavily to fund the acquisitions and
now found himself, in the words of one associate, “on the balls of his ass.”
He sought to offload some of the portfolio, and in November 2008 struck
a deal to sell his most illustrious property, 23 Wall Street, the former home
of J.P. Morgan bank, across the road from the New York Stock Exchange.
The buyer agreed to pay $150 million for it, a generous sum in a plunging
market. “No one could understand why anyone would pay $150 million for
that,” a businessman familiar with the deal told me. “The most optimistic
scenario you could create in November 2008 was $75 million.”
The buyer was China Sonangol, the joint venture between the Queens way Group and the Angolan state-owned oil company, and the deal was
part of a string of transactions that secured for Sam Pa’s network a piece of
Wall Street and an entry to the African diamond trade.
While Lev Leviev’s property acquisitions were submerged in debt, the
Queensway Group had money to burn after coming through its 2007 crisis.
Its first Angolan oil field had started producing crude; other ventures were
taking shape. A Western businessman who worked with China Sonangol
was told that the company was generating $100 million after expenses each
month. Property was the group’s new frontier, from luxury apartments in
Singapore to a planned office development in North Korea. Through deals
hatched in the recesses of the financial system, the Queensway Group and
its allies in the Futungo began to turn commodities deep beneath Africa’s oceans and soils into cash, and to turn that cash into prestigious bricks and-mortar assets within the exalted citadels of global commerce.
Before the sale of 23 Wall Street Leviev’s company announced that
China Sonangol would also be buying its stakes in the Clock Tower and
the New York Times Building. But property records show no sign of those
transactions taking place. Nonetheless, court documents show that Leviev’s US property company agreed to waive half a million dollars from the
J.P. Morgan building sale “to preserve the important business relationship
between the parties.”26
The acquisition of the J.P. Morgan building was only the most visible
link between the Queensway Group and Leviev.27 In late 2009 Leviev sold
China Sonangol his 18 percent stake in Catoca, the Angolan diamond mine
that yields stones worth hundreds of millions of dollars every year, for $250
million. China Sonangol had bailed out Leviev’s adventures in Manhattan
real estate; now Leviev had made China Sonangol the first Chinese company to own a stake in an African diamond mine.
At a dinner in Hong Kong in 2009 Pa and Leviev could be seen chatting
away. But the relationship would sour. In 2014 a Leviev spokesperson told
me that, despite corporate records that showed an enduring connection,
“the Leviev Group has no joint business with Mr. Sam Pa or with any companies associated with him.” Yet Sam Pa was already broadening his interests in African diamonds—into Zimbabwe’s Marange fields.
The campaign ad’s soundtrack belonged in some wholesome 1950s caper;
the woman’s voice narrating it was silky and chipper. A cartoon showed
pots of glittering mineral treasures strewn across Africa, particularly Zimbabwe. But this wealth was not serving those it should. Little single-prop
airplanes zoomed away with all that treasure, generating billions of dollars for foreign companies. Meanwhile, the narrator explained, “Africa, the
richest continent, remains poor.” The solution was the “indigenization” of
the mining industry. Transferring stakes in foreign mining companies’ local
subsidiaries to indigenous owners or to the state would cause a greater
share of the revenues to stay in the country. Cartoon hospitals and cartoon
schools bloomed like flowers across Zimbabwe.
The ad chimed neatly with the footage that ZBC, Zimbabwe’s state
broadcaster, had aired immediately before it, showing one of Robert MuÂ
gabe’s final rallies before the July 2013 election. Despite being only a few
months short of ninety, the president’s speeches had lost little of their polish or rage and none of their length. Zanu-PF supporters decked out in the
party’s yellow and green—some genuine, some probably dragooned—held
up banners declaring, “Zimbabwe is not for sale.” “Down with those who
would sell Zimbabwe,” boomed the emcee, denouncing the opposition
MDC’s support in the West.
The rally and the campaign cartoon captured the essence of Mugabe’s
message: the work of the liberator who threw off the yoke of white rule was
unfinished. Imperial forces still kept Zimbabwe down.
They had a point. The export of oil, gas, and minerals in raw form
contributes to keeping Africa’s resource states trapped at the foot of the
global economy, unable to industrialize. Zimbabwe has a bounteous share
of southern Africa’s minerals: nickel, platinum, and gold as well as the diamonds of Marange. The idea of indigenization seems reasonable. Across
the region the post liberation redistribution of land, mineral wealth, and
other economic interests has lagged far behind political emancipation.
Mugabe’s government has repeatedly ordered foreign mining companies
operating in the country to hand over a 51 percent stake of their local subsidiaries to indigenous black owners. Ministers described the policy with
more wrath than detail, but it was broadly supposed to follow the model
of South Africa’s Black Economic Empowerment program, under which
mining groups lend money to locals to buy the stakes, with the loans to be
repaid out of the dividends that the new owners would earn from future
profits.
Critics of the South African program point out that it has contributed
to maintaining the sort of inequitable economic structures that prevailed
under apartheid by creating a new rentier class of black moguls. But Zimbabwe’s indigenization has not even gotten that far, in part because the
authorities have been more interested in personal rather than national
enrichment. Solomon Mujuru, the former army chief whose wife became
Mugabe’s vice president in 2004, provided a telling example when he
neatly combined venality and geopolitics. According to a leaked account by the head of the local subsidiary of Impala Platinum, the biggest platinum miner in Zimbabwe, Mujuru privately offered to shield the company
from Chinese designs on its assets if it agreed to select him as its “indigenous partner and protector.”28 Such machinations have helped to stymie
any large-scale transfer of ownership even to the crony class, let alone ordinary Zimbabweans.
Mugabe has long sought to blame Zimbabwe’s economic collapse on
Western sanctions. In reality those sanctions are aimed at his personal interests and those of his coterie. Even after the European Union bowed to
lobbying by Belgium, the heart of the diamond trade, in September 2013
and permitted the sale of Zimbabwean stones in Europe by lifting sanctions on the state-owned mining company, which has stakes in several Marange ventures, Mugabe stuck to his narrative.29 “Our small and peaceful
country is threatened daily by covetous and bigoted big powers whose
hunger for domination and control of other nations and their resources
knows no bounds,” he said in a speech later that month to the UN General
Assembly in New York.30
But just as Angola’s José Eduardo dos Santos fought against apartheid
South Africa only to preside over an elite that has used oil money to cut
itself off from the rest, Robert Mugabe sits atop a feudal ruling class that
resembles in structure—if not skin color—the minority rule he waged a
guerrilla war to overthrow.
In many African resource states the oil and mining industries took hold
before independence, before the newborn nations had had a chance to develop institutions to steward the common good and circumscribe arbitrary
power. When giant oil fields were discovered in the North Sea in 1969,
Norway and the UK had the institutions in place to mitigate the destructive
force of oil money. Not so with countries such as Nigeria, where Shell was
pumping oil before British colonial rulers departed.
“The British and the rest, they were like the Spanish conquistadores,”
Folarin Gbadebo-Smith, a Nigerian polymath who qualified as a dentist
before studying at the Kennedy School of Government at Harvard, serving in the Lagos local government, running the Nigerian-Asian chamber of
commerce, and founding a think tank called the Centre for Policy Alternatives, told me when we met one afternoon at a mutual friend’s house in Abuja.31 “The colonial powers set up a machine, a machine to extract resources. When they left, it passed to the next leaders, like DNA. In so many
places the military took over to capture the rent. It is incredibly difficult to
change that structure. The foreign partners remain with their collaborators. It’s like a virus, transmitted from the colonial regime to the post-independence rulers. And these extractors, they are the opposite of a society
that is governed for the commonwealth, for the public good.”
The archetype of these extractors, those who use the conquest of natural resources to advance political power and vice versa, was Cecil John
Rhodes.32 Arriving in the central plains of what would become South Africa during the diamond frenzy of the 1870s, Rhodes rose from small-time
digger to lord of the diamond trade. He founded De Beers and, when gold
was discovered to the north of the diamond fields, launched Gold Fields of
South Africa, which still ranks among the biggest gold miners, with mines
from Australia to Peru.
Rhodes, who served as prime minister of the Cape Colony for five years
beginning in 1890 and had private armies at his command, was an avowed
imperialist. He sought relentlessly to expand northward the interwoven
projects of British colonial rule and his own corporate interests by way of
treaties, force of arms, and duplicity. His most hegemonic venture, the British South Africa Company, had a royal charter affording it powers akin to
those of a government. The region’s black inhabitants, from the Xhosa of
the eastern Cape—Nelson Mandela’s people—to Robert Mugabe’s Shona
ancestors in Rhodesia, were gradually subjugated and marginalized.
Rhodes died in 1902, humbled by his support of the disastrous Jameson
Raid into Boer territory. W. T. Stead, the great crusading newspaperman
of Victorian Britain, called Cecil Rhodes “the first of the new Dynasty of
Money Kings which has evolved in these later days as the real rulers of
the modern world.”33 That description echoes down the century that followed and past the turn of the millennium. Areva in Niger, Shell in Nigeria, Glencore in Congo—they and others like them replicate in their sheer
power over African nations the empires that came before them. Twice
when I asked seasoned mining executives in Africa what they made of the
Queensway Group, they drew an analogy with Rhodes. “It’s Rhodes all
over again . . . a huge mafia,” said one I spoke to in Zimbabwe. In Angola another executive, who had watched the group penetrate the inner circles
of power and then launch its expansion across the continent, told me, “It
has megalomaniac tendencies. It’s like Rhodes, trying to conquer Africa all
over again.” The Western businessman who had dealings with the Queensway Group updated the language: “They are an old imperialistic company. They have mineral rights, and they have connections into the highest
levels of corrupt governments, which gives them the right to take whatever
the fuck they want.”
The power structures of the new resource empires differ from those that
the likes of Rhodes built in one striking way: they comprise a lot more
black faces at higher levels. There are plenty of examples of African complicity in the exploitation of the continent by foreign powers, from the
slave trade onward. The classic imperial ploy, perfected by the British, was
to foster a client elite whose authority would be buttressed by London,
provided that that elite maintained London’s interests. Today in Africa’s
resource states the local potentates are equal partners with the oil executives, the mining magnates, and the globetrotting middlemen. There have
even been some direct reversals of the old order: Sonangol, the Futungo’s
vehicle for broadcasting its power and wealth, has bought stakes in Portuguese banks and utilities and holds Portuguese sovereign debt. When
Portugal’s prime minister went to Luanda after the EU agreed to bail out
his country’s stricken economy, he said his government would look “very
favorably” on Angolan investment.34
As Rhodes knew, to profit from natural resources, one has need of armed
forces to protect both the terrain under which they lie and the political status quo. Oil and mining groups routinely use armed private security companies to guard their facilities; bands of mercenaries are still prepared to
go to war on the promise of resource dollars. But these days raising a fully
fledged private army is generally deemed beyond the pale. For a would-be
latter-day Rhodes, the trick is to forge an alliance with the local purveyors
of violence. Sam Pa and the Queensway Group sought out Robert Mugabe’s secret police.
The Zimbabwean security forces are the heart of Mugabe’s regime, and
the Central Intelligence Organisation is the heart of those security forces. Mugabe inherited the organization when he displaced Ian Smith, Zimbabwe’s last white ruler, in 1980 and retained its boss, Ken Flower. As the first
hopeful years of Mugabe’s reign gave way to terror, the CIO became the
lead violin in his orchestra of fear.
“Apart from its core mandate of intelligence-gathering, the CIO has also
engaged in paramilitary operations and is heavily implicated in Zimbabwe’s culture of violence,” writes Knox Chitiyo, a Zimbabwean authority
on the security services who has taught at the army staff college.35 “The
CIO is notorious for abductions and the use of torture to extract information.” With as many as ten thousand personnel inside Zimbabwe plus its
informal operatives and agents abroad, the organization reaches into every
corner of society. At election time its mandate is to intimidate Zanu-PF’s
opponents and induce voters to cast their ballots for the ruling party or not
at all.36 When artisanal miners in Marange notice someone they suspect
of being a CIO agent drawing near, they warn one another by saying that
there are cattle eating in the fields, a harbinger of starvation reapplied to
signal a different kind of danger.
The CIO reports directly to Mugabe and is funded through the office
of the president, where the budget is off-limits to parliamentary scrutiny.
The secret police does business on the side too, after the fashion of the
Russian intelligence services or General Kopelipa, the head of Angola’s
military bureau.37 The Zimbabwean army, police force, and CIO have all
been linked to the obscure mining companies that were assigned rights to
mine Marange diamonds.38 “In a country filled with corrupt schemes,” a
US diplomat wrote in a 2008 cable, “the diamond business in Zimbabwe
is one of the dirtiest.”39
Sam Pa’s dealings with the CIO stretch back at least to early 2008, before the elections that year that brought about Zimbabwe’s power-sharing
government. In February 2008 Pa’s private plane began arriving at Harare
airport, according to documents purporting to be internal CIO reports,
obtained by Global Witness.40 On his monthly visits Pa bought diamonds
from the military and the CIO, which were already plugging themselves
into Marange before taking full control with Operation No Return. In
exchange Pa pumped money into Mugabe’s shadow state. According to
the leaked documents, his payments to the CIO reached $100 million
by early 2010, a sum almost equivalent to the entire annual budget of the government department that includes the secret police. He also threw in a
fleet of Nissan off-road vehicles.41
Two well-connected Zimbabwean businessmen told me that Sam Pa’s
ultimate business partner in Zimbabwe was Happyton Bonyongwe, the
head of the CIO and Mugabe’s spymaster. I have not seen anything on
paper recording such a partnership. There is, however, a paper trail that
connects the Queensway Group to the CIO.
While Sam Pa was trading stones that others were mining at Marange,
a company called Sino Zim Development won the chance to dig for itself.
The Zimbabwean government granted it a concession to mine diamonds
in the Marange fields. This was the company that Shuah Mudiwa, the opposition MP in Marange, told me was “the military of China and the CIO.”
The Chinese military does not appear to have had any direct interest; perhaps Mudiwa had got wind of Sam Pa’s arms dealing and his ties to the
Chinese intelligence services. While a handful of other companies began
to churn out stones from Marange, Sino Zim’s prospect came up dry. According to Queensway Group lawyers, by 2012 Sino Zim had given up its
concession without exporting “a single carat.”42 But Sino Zim appears to
have served another purpose: it formalized the Queensway Group’s business connection to the CIO.
By 2009 the Queensway Group was increasingly using Singapore as a
base for its worldwide operations. The companies at the apex of its corporate structure remained registered in Hong Kong, but the city-state across
the South China Sea offered many of the same opportunities for corporate
secrecy while also allowing the Queensway Group to advance its transition to a fully fledged multinational not tethered to its Chinese and African roots. On June 12, 2009, a few months after Operation No Return had
torn through Marange, Sino Zim Development Pte, Ltd. was registered
in Singapore. Its sister company, also called Sino Zim Development but
registered in Zimbabwe, received a diamond concession in the Marange
fields, and the Singaporean company shifted $50 million into the country
on behalf of the Zimbabwean company.43 Both companies were tied to the
Queensway Group’s leading figures.
As usual, Sino Zim’s ownership looped through the opaque recesses
of the financial system. The Singaporean company had two shareholders; both were companies registered in the British Virgin Islands, where ownership is secret but signatories, if they are not one of the agents who each
tend to act on behalf of thousands of companies, usually have at least an
influence over the company and are likely to own it in part or in whole.
The signatory for the company that held 70 percent of Sino Zim’s shares
was Lo Fong-hung, Sam Pa’s principal partner, who holds stakes in a score
of other Queensway companies. The signatory for the company that held
the remaining 30 percent of Sino Zim was a new addition to the Queensway constellation: Masimba Ignatius Kamba, who gave as his address the
seventh floor of Chester House in central Harare.44 In the days leading
up to Zimbabwe’s elections in July 2013 I went looking for Kamba at his
Harare address. I wanted to try to verify what I had heard: the Queensway Group’s business partner in Zimbabwe was a member of Mugabe’s
secret police. The Zimbabwean press had named Kamba as a member of
the CIO, and the opposition had named him as the organization’s director
of administration.45
Harare’s business district is livelier than the sleepy, verdant avenues of
the suburbs, but it is positively genteel compared with the furor of Lagos
or Luanda. Not far from Harare’s main bus terminal, a block over from
Robert Mugabe Road, Chester House is a bland concrete high-rise of offices. In the dingy reception I signed my name in the visitors’ book and
was informed that the elevator was broken. I set off up the winding flights
of stairs. The signs on the entrances to the offices on the lower floors said
they belonged to the Ministry of Education and Culture. I reached the seventh floor, which Kamba lists as his address in Sino Zim’s company filings,
but, for the moment, I clambered on upward, suspecting that if there were
a CIO presence in the building, it might have something to do with the
organization whose headquarters occupy the ninth and tenth floors, the
Zimbabwean Congress of Trade Unions.
Before he became the opposition leader, Morgan Tsvangirai used to
run the ZCTU. The photographs of bruised and battered unionists on the
walls of its head office testified to the organization’s active resistance to the
regime. I asked one unionist what went on on the lower floors. “The sixth
and seventh floors, that’s where we have the CIO guys,” the unionist told
me. “We don’t relocate because they just follow us.” So Ignatius Kamba was using a CIO office with a mandate to spy on trade unionists as his official address for business dealings with the Queensway Group.
Struggling to keep thoughts of the CIO’s penchant for brutality out of
my head, I walked back down the stairs. “Zelgold Investments: Registered
Money Lender” read the blue and yellow sign beside the entrance that led
from the stairwell to the offices on the seventh floor, Kamba’s registered
address. I walked in and popped my head in the first door. Inside was a
sparsely furnished room with freshly whitewashed walls. A burly, smartly
dressed man sat at a desk bellowing into a telephone. His colleague, also in
suit and tie, looked startled when I said I was looking for Masimba Ignatius
Kamba.
He missed a beat. “What company?”
“Sino Zim,” I said.
The man informed me that Sino Zim’s offices were on another street a
few blocks away, and it was clear from the atmosphere in the room that it
was time to leave.
Two days later I followed the directions to Sino Zim that the man at
Kamba’s registered office had given me. At the reception I asked again for
Kamba. “This is a Chinese company, and our bosses are in a meeting,”
came the reply. This, it turned out, was not the office of Sino Zim Development, the company that had secured the diamond concession at Marange,
but of a company with a similar name that ran the Queensway’s Group’s
cotton venture in Zimbabwe. To find Sino Zim I was told to head back out
and carry on past the headquarters of Megawatt House, the dilapidated
state electricity company. I reached Livingstone House, an angular and
imposing twenty-two-story building that was the city’s tallest when it was
constructed under white rule and named after the Scottish missionary pioneer immortalized in Western imaginings of Africa through his encounter
in 1871 with the British explorer Stanley (“Dr. Livingstone, I presume?”).
Today the skyscraper houses, among other things, Zimbabwe’s ineffectual
anticorruption commission. Its proprietors were the same outfit that has
snapped up another office complex across town and a hotel that is popular
for weddings in the suburbs—the Queensway Group.46
The lobby at Livingstone House was only slightly less grand than that of
Luanda One, the Queensway Group’s Angolan skyscraper. At the entrance to the third floor I finally saw the official logo of Sino Zim, opposite the
office for the local branch of Coca-Cola. Sino Zim’s reception area opened
onto a large balcony covered with AstroTurf and overlooking a thicket of
trees. The executives worked out of the seventh floor, I was told. I took the
elevator up and entered a well-appointed office with abstract art on the
walls. An elegant secretary informed me that Sino Zim’s management had
gone home for the day. As I wrote out a note (which was never answered)
I asked the secretary whether Sam Pa ever visited the office. She smiled.
“He comes and goes.”
The air was laden with humidity as I walked through the manmade canyons
of Hong Kong. Glittering skyscrapers were interspersed with besmirched
high-rise tenements and the occasional dilapidated edifice swathed in
bamboo scaffolding. It was a Monday morning in May 2014, and the front
pages of newspapers on sale in the bustling streets reported on the protests
that had broken out in Vietnam after China sent an oil rig into disputed
waters, the latest regional provocation by an increasingly assertive power.
I walked past the spot where, nine years earlier, a close-range volley of tear
gas floored me as I reported on a march on the World Trade Organization
summit taking place within the Hong Kong Exhibition Centre by Korean
farmers demonstrating against the privations of globalization.
I reached the address I was looking for: Pacific Place, the crown of towers at 88 Queensway. I went through the mall at street level, with its luxury
boutiques and moody lighting, and up to the courtyard between the towers, decorated with greenery. An expensive café catered to the cosmopolitan financiers who work here. China Sonangol, China International Fund,
and assorted more discreet companies of the Queensway Group are registered at Hong Kong’s corporate registry at the tenth floor of Two Pacific
Place, the second tower with the curved veneer of mirrored glass.
The spacious lobby was decorated with little paintings on the walls in a
jaunty 1940s style, depicting businessmen carrying briefcases and playing
golf and women walking tiny dogs and having their skirts blown upward
like Marilyn Monroe. I emerged from the lift—all marble and mirrors—on
the tenth floor and saw, behind glass doors, the logo of China Sonangol.
Inside there was a waiting room off to the left and a knee-high statue
of an African woman, carved in dark stone. I buzzed the intercom, and a
woman in glasses and blue blouse let me in. Before I could introduce myself another woman emerged. She was short, with a rounded face and black
hair in a bob and wearing a black blouse and black trousers. She asked who
I was. I explained that I worked as a reporter for the Financial Times and
was writing a book in which China Sonangol would appear. Both women
smiled politely, but a distinct awkwardness remained in the air.
I rattled off the names of other companies in the Queensway Group registered to the address where we were standing: China International Fund,
New Bright, Dayuan. I named Lo Fong-hung, who has listed this office as
her address. The woman in black told me she didn’t know of these companies. I asked about China Sonangol, whose logo was on the wall beside
us. She told me to look at the website. I explained I had sent countless
e-mails, none of which had received a reply. She insisted I send another
one. I asked whether there was anyone at the office who could answer my
questions. She told me she was not “senior,” that there were no managers
here, that I must have the wrong place. I asked whether I could leave a written message for a manager. She declined. I asked for the name of someone I
could contact. She declined. I asked her name. She declined. I pointed to a
stack of brochures including copies of CIF Space, the in-house newsletter
of China International Fund, a company the woman had said she knew
nothing about. I asked to have one. “We cannot distribute them,” she said,
then added, “I think you should leave.” I stepped out, the door clicked behind me, and the woman vanished. I buzzed the intercom again and tried
to ask after Sam Pa. “No,” said the receptionist.
It was the same story at the office on the forty-fourth floor of the next
tower along the main road, the Lippo Centre at 89 Queensway, a building
that resembles a giant Jenga stack and to which the group had recently
switched some of its registered addresses. There, I didn’t even make it
through the door of another China Sonangol office before being asked to
leave.
I did, however, get hold of Sam Pa’s mobile number. I called it repeatedly. Mostly it rang out or went to a message suggesting he was out of Hong
Kong. Twice he answered, and I explained that I was going to write about him. He spoke English with a thick accent. The first time he said he was
at lunch; the second time he said he was in a meeting. Both times he told
me he would call back. He never did. As far as I know he has never given
an interview.
The one person from the Queensway Group who would speak to me
was China Sonangol’s lawyer, Jee Kin Wee. We exchanged e-mails in
2014. I wrote a detailed letter to him, posing fifty-two questions about the
Queensway Group and its activities. A letter came back, signed China Sonangol, which answered four of them. “Due to confidentiality agreements
and our legitimate desire for privacy, which private companies are entitled
to, we will not be providing you with any additional information than is
necessary [sic],” the letter read. “We do however reserve our rights to pursue legal remedies if you repeat or publish defamatory statements.” It went
on, “We are not a listed company and the Law does not require us to disclose all our business dealings in the same manner as listed companies.”47
Sam Pa travels constantly. His jet rarely stays put for more than a few
days. In the first months of 2014 alone it shuttled between Hong Kong,
Singapore, Mauritius, Madagascar, the Maldives, Angola, Zimbabwe, Indonesia (where China Sonangol has a slice of a natural gas field), and
Beijing.48
Like Rhodes before him, Pa’s African horizons are forever widening. In
December 2013 Ernest Bai Koroma, the president of Sierra Leone, a nation
scarred by its diamond-funded war but where peace has started to take
hold, stopped off in Angola on his way home from Nelson Mandela’s memorial service in South Africa. Over dinner and red wine at Luanda One,
the Queensway Group’s golden skyscraper, Koroma held what a statement
from his office described as “fruitful discussions with Chinese Business
Tycoon and Vice Chairman of China International Fund Limited, Mr.
Sam, on key infrastructural developments to be implemented in Sierra Leone.”49 A photograph shows Koroma engrossed in conversation with Pa,
who is dressed in his usual dark suit and spectacles, a mobile phone on the
table in front of him, gesturing as through ticking off items on a checklist.
(Another photograph, taken a year earlier, shows Pa looking on as Koroma
signs a memorandum of understanding between Sierra Leone, China International Fund, and China Railway Construction Corporation, a giant Chinese state-owned company that employs 240,000 people, for a slew of
projects ranging from diamonds to fisheries.50)
The Queensway empire is expanding to new frontiers far from its heartlands in Africa’s oil fields, mineral seams, and diamond pipes. China Sonangol recruited Alain Fanaie, a former senior resource-industry banker
at Crédit Agricole, a French bank that had helped it arrange multi-billion dollar loans. Fanaie was installed as chief executive of China Sonangol,
operating out of its Singapore headquarters. (In July 2014 China Sonangol
issued a brief statement saying that Fanaie had resigned.51) But even as it
acquired the outward trappings of a regular company, Sam Pa remained its
chief emissary.
In September 2013 Sam Pa posed for photographs at a signing ceremony
in Dubai beside Sheikh Ahmed bin Saeed al-Maktoum, a senior member
of the oil-rich emirate’s royal family. They had just put ink to a deal for
China Sonangol to build what Dubai’s official press release called a “state of-the-art refinery” to process crude oil.52 In May 2014 Pa attended another
ceremony, this time in Beijing. He sat next to Marat Khusnullin, the deputy mayor of Moscow, and Hu Zhenyi, the vice president of China Railway Construction Corporation. Pa was representing China International
Fund in an agreement to build a new metro line in Moscow. Khusnullin,
the deputy mayor, was in town as part of the delegation accompanying
Vladimir Putin to China. Two months earlier Putin had annexed Crimea
following the fall of the pro-Russian president of Ukraine, prompting the
United States and Europe to impose sanctions on Putin’s inner circle and
Russia’s oil industry. It was a deal straight out of the Queensway Group’s
African playbook: cultivating a regime recently placed under international
sanctions, denounced as a pariah in the West, mired in corruption, and
rich in natural resources.
J. R. Mailey, an American researcher who was part of the congressional
research team that first identified the Queensway Group and coined its
name, has developed an encyclopedic knowledge of Sam Pa’s corporate
empire. I asked him what he thought would become of the Queensway
Group. “Even if Queensway’s business empire crumbles, everything that
allowed Sam Pa to rise in the first place is still there. He still has the Rolodex; he still knows how to get close to elites in fragile states. Most importantly he knows how to operate under the radar and just beyond the reach of law enforcement. If it weren’t him, it would be someone else. The system is still there: these investors can still form a company without saying
who they are, they can still anchor their business in a country that is not
concerned about investors’ behavior overseas, and, sadly, there’s no shortage of resource-rich fragile states on which these investors can prey.”53
Sino Zim gave up its concession in Zimbabwe’s diamond fields, saying
it was “commercially not viable.” It was said in Harare’s mining circles in
2013 that the company was looking at another corner of Marange as well
as mineral prospects. China International Fund, the Queensway Group’s
outward face, denied giving money to Mugabe’s secret police.54 But Sam
Pa carried on coming and going from Harare.
In April 2014, eight months after Robert Mugabe rigged his way back to
total control of a country he had already ruled for thirty-three years, the US
Treasury added Sam Pa’s seven names to its list of “specially designated
nationals.” The Zimbabwean Sino Zim Development was also added to
the list, though not the Singaporean company with the near-identical
name. The people and companies on the list are those “owned or controlled by, or acting for or on behalf of ” the rulers of countries subject to
US sanctions. American companies are prohibited from doing business
with them, and their US assets are frozen. Beijing had already tried to put
some distance between itself and the Queensway Group. The Chinese embassy in Harare said in 2009 that the Chinese government had “nothing to
do with the business operations of a company named China International
Fund.”55 (Even the Queensway Group itself maintains a fig leaf of separation between its corporate structure and the man who jets round the world
striking deals on its behalf: China Sonangol’s lawyer told me that Sam Pa
was merely an “adviser” to the company.56)
But Chinese companies carried on winning contracts in Africa’s resource states on the coattails of the Queensway Group. The US authorities
stopped short of adding to the sanctions list China Sonangol, whose partners in Angolan oil ventures include the biggest American oil companies
and on whose behalf Sam Pa jets around the world signing deals.57
Nothing that we have done is reversible. Those were Mahmoud Thiam’s
words as he prepared to leave Guinea and go back to New York, his miningdeals complete. The sentiment might seem ludicrous in hindsight: the
elected government that followed the junta Thiam served ejected Sam Pa
and Beny Steinmetz, both of whom he had supported. In another way,
though, he was right. Sam Pa’s reign as a baron of the African resource
trade might endure, or he might return to obscurity as rapidly as he rose
from it, felled by the fickle politics of resource states. But the looting machine has known many captains in many guises: King Leopold, Cecil
Rhodes, Mobutu, Mugabe, and hosts of executives from Western oil and
mining companies and their new Chinese counterparts. They are rivals ostensibly, yet all of them profit from the natural wealth whose curse sickens
the lives of hundreds of millions of Africans.
The empires of colonial Europe and the Cold War superpowers have
given way to a new form of dominion over the continent that serves as the
mine of the world—new empires controlled not by nations but by alliances
of unaccountable African rulers governing through shadow states, middlemen who connect them to the global resource economy, and multinational
companies from the West and the East that cloak their corruption in corporate secrecy. We prefer not to think of the mothers of eastern Congo,
the slum dwellers of Luanda, and the miners of Marange as we talk on our
phones, fill up our cars, and propose to our lovers. As long as we go on
choosing to avert our gaze, the looting machine will endure.
notes and source
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