Belarusian firm Goldfields wreaks havoc in Manicaland

ZIMBABWE Goldfields (Private) Limited, a joint venture between the state-owned Zimbabwe Mining Development Corporation (ZMDC) and Midlands Goldfields Limited is violating mining laws while its operations have resulted in massive environmental damage and a cholera outbreak in Odzi, an investigation has established.

KENNETH MATIMAIRE/ BRENNA MATENDERE

The company, which is operating in Manicaland province, can be traced to Belarusian strongman Alexander Lukashenko’s close lieutenants as explained later in this investigation.

Zim Goldfields has been operating with an expired special grant licence and has contributed to the pollution and diversion of Mutare River, leading to onward pollution of Odzi River, a tributary of the Save River.

As a result, villagers and livestock in Odzi district and surrounding areas are now exposed to unsafe water.

Odzi district has been hit by a cholera outbreak, which villagers and health officials say was caused by unsafe water sources, as a result of the contamination and diversion of their once-reliable source of water.

The Zimbabwe National Water Authority (Zinwa) confirmed the contamination of the rivers “as a result of the operations of a mining company”.

The Environmental Management Authority (Ema) also confirmed the contamination. Zimbabwe Goldfields (Pvt) Ltd was formed after an agreement between President Emmerson Mnangagwa and his Belarusian counterpart Lukashenko, according to an April 2022 environmental impact assessment (EIA) progress report of the mine.

The formation of the company was part of several highly publicised “mega deals” following Mnangagwa’s visit to Belarus in 2018, which was reciprocated by two visits by Lukashenko’s confidante, Viktar Sheiman, the same year.

 Sheiman was Head of the Presidential Administration at the time and was assigned to oversee exports to Zimbabwe.

 The cordial relations between the two autocratic administrations resulted in the signing of a number of shady contracts for the supply of tractors and forestry machinery running into hundreds of millions of dollars.

Zim Goldfields was established to handle a wide range of minerals including oil, gold and platinum. The company was awarded vast tracts of land to mine minerals in the country.

The investment is a partnership between ZMDC, which has 30% shareholding and Midlands Goldfields Limited (MGL) with a 70% stake, according to documents available online that were stamped by the Deeds Office in 2018. The Zim Goldfields company file has disappeared from the Deeds Office.

“Zimbabwe Gold Mining Fields was formed after the agreement between the two heads of state (Zimbabwe and Belarus),” reads an April 2022 progress report of the environmental impact assessment (EIA) of the mine.

The report further indicates that the agreement was initially signed in 2015. Mnangagwa, who was then vice-president, brokered the deal but the project was suppressed during the late former president Robert Mugabe’s era.

Mnangagwa, however, revisited the abandoned deal soon after attaining power on the back of a military coup, indicating strong interest in the deal by the Zimbabwean president.

Zimbabwe is importing buses, trucks, tractors and other farming equipment from Belarus, amid indications that Harare may be mortgaging its minerals to meet its part of the bargain.

“No one is going to cooperate for free.  When they have no money, they are willing to pay with minerals. We are ok about it. The most important thing is to shape the economy, so that there is a profit for Belarus,” Sheiman was quoted as saying on 13 March 2018 in a report to Lukashenko after his visit to Zimbabwe.

This was also repeated by the Belarusian Investigative Centre. The NewsHawks investigation with support from Information Development Trust (IDT), under a project supporting investigative reporting focusing on the accountability and governance of foreign interests and investments in Zimbabwe and southern Africa, has unearthed that the politically-linked Belarusian investor’s mining activities are marred by a series of irregularities.

Information gathered highlights that the company’s shareholding structure is in limbo, while its special grant licence expired in May. It was further gathered that the company has been sub-contracting Chinese firms at its gold claim at Premier Estate in eastern Zimbabwe.

 These include Zhong Jin Investment, Sino Africa and Climax Investments. Serious environmental and mining laws violations also emerged.

Political backing

Efforts to get a comment from the Zim Goldfields company representative, Dmitri Krasilnikov, were fruitless as he did not respond to calls or messages sent and delivered via WhatsApp.

 To avoid confusion, the investigation reached out to another company with a strikingly similar name — Zim Goldfields — a division of Heritage Pay Limited, registered in the United Kingdom and also involved in mining in the country.

The company distanced itself from the Belarusian investment. The ZMDC confirmed being in partnership with the UK-registered MGL to form Zim Goldfields. Online searches indicate that MGL is a London-registered shell company under the directorship of Robert Michael Friedberg.

Friedberg also features in leaked documents from the Pandora Papers exposé as a nominee to a Seychelles entity with a similar name – Midlands Goldfields Foundation (MGF).

 Documents available online through a report by the Organised Crime and Corruption Project (OCCRP) indicate that MGF is a 50-50 shareholding partnership between Seigi Sheiman and businessman Alexander Zingman.

Seigi is son to Viktor Sheiman, an old confidante of Belarusian autocrat Lukashenko while Zingman is a close ally. Zingman is also an alleged arms dealer and a friend to Mnangagwa, who appointed him Zimbabwe’s honorary consul to Belarus in 2019.

Data gathered as part of the investigation indicates that MGF was established in Seychelles on 7 December 2017 followed by the incorporation of MGL in London 15 days later.

This led to the establishment of Zim Goldfields on 10 April 2018 after a follow-up visit by Sheiman the previous month on behalf of the Belarus government.

Questionable shareholding

Documents extracted from a company check further reveal that MGL, the major shareholder in Zim Goldfields, was dissolved on 22 September 2020.

This raises questions regarding the legality of the Zimbabwean investment, considering that its major shareholder is now non-existent.

Legal experts indicated that the company can continue to operate at law if the shares were transferred to another individual or entity.

However, ZMDC managing director Blessing Chitambira stated that “it is [Midlands Goldfields] still the [major] partner.”

Asked whether he was aware that MGL, the so-called major shareholder, was dissolved nearly three years ago, Chitambira said “the Belarusians are better positioned to respond to that.”

Curiously, although the Belarusians are involved with the day-to-day running of the investment, the ZMDC plays a supervisory role at board level and should be up to date with the information pertaining to its shareholding partners.

The dissolution of MGL in London coincided with that of MGF in Seychelles, which came after Zimbabwe tightened its ban on riverbed mining during the same month.

Information gathered indicates that Zim Goldfields is operating like a shell company as it is outsourcing most of its major services. In November 2020, the company sparked national outrage after it buried alive two gold panners through a fatal land reclamation exercise at its mining site that was carried out by a Chinese company, Zhong Jin Investment, that it had outsourced.

“Right now they are outsourcing services to Sino Africa and Climax Investments for their mining,” said Clinton Masanga, director of Penhalonga Youth Development Trust, an organisation which advocates progressive mining in the area under investigation.

Expired special grant

Moreover, investigations unearthed that the company currently does not have a licence to mine after its special grant expired in May.

A letter from the ministry of Mines and Mining Development obtained during the investigation indicated that Zim Goldfields was awarded a total of 54 650 hectares through three special grants to mine “alluvial gold and other minerals”.

Special grant number 6861 measures 36 600 hectares (ha) and is situated at a site identified as RA 1518 in Mashonaland East province. The two other special grants are located in Manicaland, SG number 6860, which measures 7 600ha and situated at a site identified as RA MNC 001.

The site in question was awarded under special grant 6859, which measures 10 450ha and situated along RA Mutare River, according to the letter from the Mines ministry.

The letter dated 29 May 2018 signed by the then Mines ministry permanent secretary Munesu Munodawafa and directed to the then acting provincial mining director for Manicaland identified as one Godza, stated: “be advised the following special grants to mine for alluvial gold and other winnable minerals have been granted and are set to expire on 28 May 2023.”

“Yes, it [special grant] expired,” confirmed Chitambira.

Asked why the company was still operating when the licence expired, the ZMDC boss had this to say: “They are in the process of renewing and can only be barred from operating when licence renewal has been denied.”

Environmental and mining laws breach

The investigation further unearthed that Zim Goldfields is carrying out riverbed mining on some sections of Mutare River, which has resulted in the adulteration and diversion of the strategic water body.

 The mining activities have, in turn, discoloured and contaminated the river, which is essential to both local human and wildlife inhabitants.

Current satellite images captured via Google Maps give a clear mapping of points where riverbed mining and diversion of Mutare River have occurred, respectively. Other photographs taken earlier at the site also show trucks taking gold ore from a diverted river point to the grinding and processing mill.

The findings are in clear violation of the country’s environmental laws and prohibited under the National Parks and Riverbed and Alluvial Mining on Rivers law, initially introduced in 2014 and tightened in 2020.

 Ironically, the government in 2015 banned a Russian company, DTZ OZGEO, for conducting alluvial gold mining activities along the same river and on the same claim, citing environmental concerns.

However, Ema spokesperson Amkela Sidange said Zim Goldfields, which has a valid environmental impact assessment for the claim, licence number 8000060866 issued on 14 December 2018, “is not mining on riverbed” and that it is a pilot project.

However, Krasilnikov is on record as admitting that they had to shut down operations at some point due to a ban on riverbed mining.

 Moreover, EIA documents gathered during the investigation indicate that the rural district council, which the project falls under, is aware of the environmental damage that might occur in the area as a result of the project.

“This environmental damage is related to water pollution and land degradation,” reads part of the EIA issued on 2 November 2018.

 On-site observations revealed that the company only installed a perimeter security fence on one end of the entire mining site while the other flanks are not secured.

There are no informative and warning signs or security barricades and gates to secure the mine, posing great danger to stray livestock and members of the community as the mine is sited at the heart of a resettled farming area.

 “There are two sites. The one outsourced to Climax Investments is the one that has been fairly secured but the other one outsourced to Sino Africa is completely open,” said Masanga.

This is in contravention of Statutory Instrument 109 of 1990, section 30(2), which states that “every entrance to every vertical or steeply — inclined shaft, winze, sump, rock pass or other dangerous excavations shall be kept adequately closed by a fence, barrier, door or gate, or shall be kept adequately covered so as to prevent persons having unintentional access to or accidentally slipping or falling into such excavations.”

The NewsHawks is in possession of one of the several reports that have been compiled citing irregularities at Zim Goldfields, which the company continues to defy.

Chitambira confirmed that the ZMDC is aware of the shortcomings at the mining site.

 “We are aware. The issues (environmental and mining violations) have been brought to our attention several times at board level,” he said.

Water contamination

The unsustainable operations of Zim Goldfields upstream of Mutare River have led to the contamination of Odzi River and its tributary, Mutare River.

 Zinwa has since discontinued the distribution of tap water in the area due to the contamination, forcing residents to rely on unsafe water sources and, in the process, contracting cholera.

Zinwa spokesperson, Marjorie Munyonga, confirmed the contamination.

 “The Zimbabwe National Water Authority wishes to advise that it has noted, with great concern, water pollution in Odzi River. The pollution incident was discovered through the daily water quality checks carried out by Zinwa personnel at Odzi Water Supply,” she said.

Munyonga revealed that both Zinwa and Ema had conducted the tests.

 “Investigations by the Authority and the Environmental Management Agency revealed some water abstraction equipment by a mining company in the area as the source of the pollutants.

“To protect the water source from further pollution, the mining company in question has since been ordered to cease its water abstraction activities in line with the law while also taking the necessary steps to ensure that their operations comply with the requirements of the Water Act and other applicable statutes,” she said.

 Munyonga said Zinwa would continue working with relevant stakeholders and government agencies to protect water sources from pollution.

She, however, claimed the current water crisis in Odzi is a result of a technical fault at the station which the authority is fixing.

Cholera outbreak

Odzi, a district west of Mutare, is battling a cholera outbreak, which villagers, health personnel and civil society organisations attribute to the contamination of water sources.

 Audio recordings of a village health worker and a Health ministry official from Odzi that this publication has in its possession explained that the community is battling a cholera outbreak.

“Diagnosis is being done at Odzi Clinic and several cases of cholera have since been recorded. We are currently doing awareness campaigns in the community to conscientise the residents about cholera as well as conducting tests of suspected patients and offering treatment for them. The work is being supported by the ministry of Health and we are implementing the whole treatment cycle,” said the health official.

A village health worker said: “There has been a problem of cholera in the area and nurses as well as other health officials have been moving around educating people about the need to maintain hygiene under the circumstances,” she said.

Manicaland provincial medical director, Munyaradzi Mukuzunga, confirmed the cholera cases in Odzi. Mukuzunga, however, insisted that the cholera cases have not gone out of control to warrant a public scare.

 “The district (Odzi) is currently handling the cases of cholera recorded there, but the situation has not deteriorated to a serious level. There are programmes being done in the community by the district to manage the situation,” he said.

Ema’s Sidange said the organisation was carrying out monthly water monitoring tests in Odzi since the emergence of the cholera crisis.

“As already indicated, we are now doing ambient water monitoring monthly because it is key under the obligatory roles of Ema where the results of the water quality is shared with relevant stakeholders, including local authority, for decision making and ultimately necessary remediation.

“The agency has also widened opportunities and continues making calls for regularisation of mining activities, hence the launch of the Environmental Management Plan to encourage even small scale-miners to register and mine in compliance with environmental laws of the country,” she said.