Who’s bankrolling Mugabe, and what kind of assets are being pimped around?

Why have the names of those bankrolling Zimbabwe's deranged president, Robert Mugabe, been kept so well under wraps? For one thing, the deals behind the bankrolling are not simple, and for another, the robber barons are pretty smart and can also be pretty damn dangerous.

Depending on how you count, there are four or five individuals bankrolling Mugabe. No matter how you count, they are all palefaces. This may be surprising, given Mugabe's year 2000 "land reform" package where he booted an estimated 4,000 palefaces off Zimbabwe's commercial farms. The collapse of one of the economy's biggest cornerstones triggered a savage economic decline, to the extent that Zimbabwe has long been bankrupt, with more than 80% unemployment, and delivering the highest inflation rate ever known to the human species. Roll up with your wheelbarrow, and trade your billion dollars for a beer.

Mugabe is also bankrupt, in every sense of the word, and relies on patronage from his chosen palefaces. In recent times, the robber barons have become increasingly bold, apparently secure in the idea that assets pimped out to them are sacrosanct. The most public of these foul deals was described in an announcement dated 11 April this year, when London-listed Camec described how it had acquired a choice duo of platinum deposits on Zimbabwe's Grand Dyke.

Camec bought 100% of dodgy-sounding Lefever, a (no surprise) British Virgin Islands company, from Meryweather Investments, a misnomer of note. Lefever owns 60% of Todal, a Zimbabwean company, which has the rights to the Bougai and Kironde platinum concessions, owned until recently by Anglo Platinum, in which Anglo American holds a 76% stake. Everything points to the two concessions suffering zero-payment confiscation from Anglo Platinum.

For Lefever, Camec agreed to pay Meryweather USD 5m cash, plus 215m new Camec shares (currently worth USD 234m). Camec also agreed to loan USD 100m to Lefever. This is to be repaid by Zimbabwean state-owned mining company ZMDC, which owns the other 40% of Todal. This thinly disguised donation is nothing less than an unsecured cash loan to the Zimbabwe government; for that, read "Robert Mugabe".

Neither Camec nor its representatives are prepared to unveil the names of the human owners of Meryweather, who have effectively been enriched to the tune of USD 339m. It needs only a feeble imagination to figure out who's hiding behind that story. Camec's key movers and shakers are two of its executives, Phillipe Edmonds, who apparently once played cricket for England, and Andrew Groves, the rough speaking son of a Harare policeman. Edmonds and Groves have shown huge appetites for preying on vulnerable mining assets, deploying interesting business tactics, to boot.

Starting around the end of 2005, Edmonds and Groves started negotiating the purchase by Camec of number of mining assets in Katanga Province, Democratic Republic of the Congo, from Conrad Muller "Billy" Rautenbach, a Zimbabwean who was and is still facing extradition applications from South African authorities and was last year declared a persona non grata in the DRC.

Rautenbach did not come by the DRC assets by accident. Excerpts from various reports filed with the UN Security Council by the UN's Panel of Experts on the DRC lay out the basic story, which starts in November 1998 when Rautenbach was named managing director of DRC parastatal Gécamines during a visit to Harare by the-then DRC president Laurent-Désiré Kabila (later assassinated by a bodyguard).

According to this deal, some of Gécamines's best cobalt-producing areas were transferred to a joint venture between Rautenbach's Ridgepointe Overseas Development, and the Central Mining Group, a Congolese company controlled by Pierre-Victor Mpoyo, the-then DRC minister of state. Rautenbach also acted as managing director of the joint venture, which, said the panel, was "a blatant conflict of interests".

The UN panel had information that Kabila's decision to appoint Rautenbach - a man with no mining experience but with close ties to Mugabe's ruling ZANU-PF party - was made at the request of Mugabe during the visit. The DRC government primarily relied on Gécamines as a means to ensure the continued support of Zimbabwe's military during another period of mayhem in the DRC. The transfer of assets was part of the political deal struck between the two country presidents, leading to Operation Sovereign Legitimacy (Osleg), a mechanism designed to recompense Zimbabwe for its military intervention in the DRC between 1998 and 2003.

Rautenbach was described by the UN Panel as a major player in the "elite network" of twisted politicians, military commanders and shady businessmen that organised the transfer of billions of dollars of state assets to private companies with no compensation or direct revenue benefit accruing to the state treasuries of either the DRC or Zimbabwe.

Given his various propensities, Rautenbach did not last long at Gécamines; Kabila replaced him with George Forrest, a highly successful Katanga Province businessman, in March 1999, apparently after Rautenbach persistently failed to pay the DRC government its share of profits from the joint venture. Kabila also accused Rautenbach of transferring profits to a shell company, as well as stockpiling cobalt in South Africa.

The UN panel alleged that during Rautenbach's short tenure at Gécamines, he acted as a conduit for payments to Mugabe and other senior figures in Zimbabwe's political and military elite resulting from the "illegal exploitation" (a euphemism for "looting") of assets that historically belonged to Gécamines.

As pointed out, starting back in 2005, Rautenbach started selling certain cobalt-copper assets in the Katanga Province to Camec, mainly in return for Camec shares; for some time, Rautenbach was the biggest shareholder in Camec. Camec bought a number of DRC-related entities from Rautenbach, principally the Congo Resources Joint Venture, which gave Camec access to a 50% stake in Mukondo Mountain, a substantial cobalt-copper deposit.

Many of the Rautenbach-Camec deals were opaque; thus, in February 2006, Rautenbach entered an agreement with Camec for the sale of most of his interests in the Congo Cobalt Company (CoCoCo) to Camec. Back at the ranch, subsequent to Forrest taking over at Gécamines, Mukondo and a number of adjacent and associate concessions had been acquired by John Bredenkamp, a Zimbabwean.

Under various threats from Rautenbach, Bredenkamp let half of Mukondo and its associates go to Rautenbach. Bredenkamp sold his remaining half of Mukondo in June 2006 for around USD 60m to Dan Gertler, a highly connected player in the DRC resources game. In reaction to Rautenbach's business practices, Gertler immediately ordered a halt to activities on Mukondo.

In the battle that ensued, Rautenbach was booted out of the DRC - by the government, naturally - in July 2007; a month later, the DRC attorney general declared the concession licences that Camec had apparently bought from Rautenbach to be null and void. But then they all suddenly jumped into the same bed; mining at Mukondo resumed after Camec's licences were mysteriously, quietly, and fully restored. Gertler then vended his stake in Mukondo into Camec, becoming its biggest shareholder.

Meanwhile, international coal prices, like practically all commodity prices, were on the move and Rautenbach managed to become mixed up with the affairs of Hwange Colliery, a mining company in Zimbabwe's far west, listed on the Johannesburg and Harare bourses. Hwange not only has sufficient reserves to continue mining at the rate of 5m tons a year for the next 150 years, it is also endowed with a seam of rich coking coal.

Coking coal, rare among coal deposits in Africa, is the most valuable of all grades of coal, and is considered essential in certain mine processing operations such as the reduction of iron ore. Hwange markets its coking coal in the forms of breeze, peas, nuts, metallurgical coke, and foundry coke. Most of its coking coal output is sold to ready customers to the north in Zambia and the DRC, typically members of the copperbelt's booming brownfields mines. These are customers that have ready hard cash in the form of US dollars; say no more.

And then there is Nicholas van Hoogstraten, a controversial businessman of British origin who has long held links with Zimbabwe. Van Hoogstraten was convicted in 1968 of paying a gang to attack a business associate. In 2002 he was sentenced to 10 years for the manslaughter of a business rival; the verdict was overturned on appeal, but in 2005 he was ordered to pay the victim's family £6m in a civil case.

Born in 1945, Van Hoogstraten bought an estate in Zimbabwe when he was 19. In 2005 he announced plans to take over NMB, a major Zimbabwe bank, but then last year he sold the shares he had acquired. In 2006 Van Hoogstraten told the London Sunday Times that Mugabe was "a true English gentleman". He flashed a memorandum for a loan of $10m made to Mugabe, and commented: "In six months' time, when the interest is due, it would be cheaper for them to just kill me. I think I am more use to the government in Zimbabwe alive".

Word on the ground in Zimbabwe is that Van Hoogstraten is eyeing consolidation of the glorious Nuanetsi ranches in Matabeleland. It is also said that Camec is looking to build a monstrous 50,000 sugar cane plantation in the area. The district is prone to droughts; before such a sugar project can go ahead, a giant dam will have to be built. If Mugabe goes on and finally retires at the age of 128, rest assured that palefaces will once again be running the country's farms and mines. The strong and overwhelming empirical evidence shows that Mugabe wants that, whether he likes it or not.