[38] De Beers Bows To Zaire Rebels

Text:

http://www.mg.co.za/mg/news/97apr2/18apr-debeers.html

De Beers bows
to Zaire rebels

After decades of close relations with the Mobutu regime, mining house De Beers
was quick to jump ship to the Zaire rebels
-- even agreeing to end ties with its old
foe. But De Beers wasn't quite quick
enough ... CHRIS MCGREAL and
STEFAANS BRÜMMER report



E BEERS has secretly bowed to Zairean rebel demands that it sever ties with President
Mobutu Sese Seko's regime, after decades of close partnership with the despot who plundered his country to the brink of collapse.

The corporation jumped the Mobutu ship as multinationals scrambled to curry favour with Laurent Kabila's rebel Alliance of Democratic Forces for the Liberation of Congo-Zaire and divide up Zaire's vast mineral riches.

But De Beers, like its associate company Anglo American, has been slow off the mark. A
Canada-based firm, America Mineral Fields, this week signed a $1-billion deal with the rebel alliance, which now controls half of Zaire and most of its mineral wealth.

The head of De Beers's operation in Kinshasa, Nicholas Davenport, accompanied by an Anglo
director, flew to the rebel headquarters in Goma last week to meet Kabila. The rebel alliance laid out its conditions for De Beers even to negotiate continuing business in Zaire.

Top of the list was an end to all dealings with the crumbling regime in Kinshasa. Alliance finance minister Mawampanga Mwana Nanga told the Mail &
Guardian the company had acquiesced.

"There was no written agreement between us saying stop seeing Mobutu, but what we told them was they would be better off if they didn't talk to Mobutu or his crowd, or give them any more money. They
understood," he said.

De Beers declined to discuss the agreement, saying it was "not prepared to make any further comments on the contents of our discussions with Mr Kabila".

Despite the agreement, the rebels remain
unsympathetic to the company which Zaireans blame more than any other foreign firm for helping Mobutu suck his country dry by funnelling hundreds of millions of dollars in "taxes" his way. Mawampanga said De Beers and Anglo would be free to continue working in the country, but not as a monopoly.

Existing contracts would be respected - even if they had been obtained in irregular ways - but could be reviewed. "We tell [companies] that you can work within the contract of the deal, no matter how bad it is. But for your interests and our interests, we are going to sit down and go through that contract in good faith to ensure that everyone is benefiting ...

"We want to play by the rules. That is the toughest thing for Anglo American and those to swallow. In Africa they're not used to doing business like that. If they don't like it and they think they're going to keep their monopoly, they can go to hell," he said.

Adding substance to its threat, the rebel alliance this week awarded the $1 -billion tender for a copper and cobalt reclamation project and a new zinc plant in Shaba province to American Mineral. Both South Africa's Anglo and Gencor had also tendered. Initial cash injections from the deal will help fund the war against Mobutu.

Rubbing salt into Anglo's wounds, Mawampanga was quoted this week as claiming that the winning tender had been submitted in December by American
Mineral, but that "corrupt politicians" of Mobutu's government - then still in control of Shaba province - had intervened in February to award it to Anglo. "We want to send a message to the world that from now on there will be open and transparent dealings."

American Mineral investor relations manager Earl Young confirmed to the M&G that his company had "discovered information" on the Anglo bid which it had passed to the rebels. "Kabila made the right decision."

Zaire's diamond industry alone is potentially worth about $500-million a year, although massive illicit mining makes nonsense of the official figures.

De Beers had a monopoly over the output from the largest legal diamond mining operation, the
government-controlled Miba. It has an indirect 4% stake in Miba, but through its Central Selling Organisation had rights to the entire production, which made it more than $150-million a year.

De Beers also bought up diamonds from thousands of individual diggers through five buying offices.

But with almost all Zaire's diamond fields in rebel hands and four of its offices shut down, panic set in at De Beers - leading to Davenport's visit - after the rebels openly flirted with America Mineral and an associate company, America Diamond Buyers.

Recently, Kabila's alliance sold America Diamond Buyers the right to buy gold and diamonds in the rebels' conquered zone - which they dub the
Democratic Republic of Congo - in direct competition with De Beers's interests.

In Kisangani, taken by the rebels a month ago, America Diamond Buyers now runs the only licensed diamond-buying office after De Beers reportedly turned down an earlier rebel request to reopen its office there, which it had closed in December. The Wall Street Journal this week said America Diamond Buyers rakes in about $100 000 in diamonds a day at its office.

America Minerals has been currying favour with the rebels for weeks. It has provided a jet for
Mawampanga, and a company official said it had outbid De Beers in diamond auctions to "do a favour" for the alliance.

The prime mover in the company's success with Kabila is Jean-Raymond Boulle, a somewhat controversial Mauritius-born mining venture capitalist who set up America Diamond Buyers and is the principal
shareholder in America Mineral.

A "fast mover" who has been involved in numerous law suits, Boulle calls Monaco home but is said to live out of hotels as he promotes his deals around the world. Young described him as "a very trusty and loyal man who has probably befriended people who have taken advantage of him".

Boulle was quoted this week as saying he supported the rebel cause and saw the alliance as the de facto government. "The reason I went in to see the rebels is that I see a new era dawning on Zaire ... It was a risk - but to us it was the logical one."

Ironically Boulle, like senior America Mineral officers Mark Collins and South African Marius Botha, cut his mining teeth with Anglo and De Beers. Another South African, former lawyer and University of Cape Town lecturer Simon Brownlie, is president of America Mineral.

What may well also have counted in America Mineral's favour with Kabila is the Canadian company's
association with International Defence and Security (Idas), a Dutch-Antilles -registered security company which stepped into the shoes of South Africa's Executive Outcomes after the mercenary outfit was forced to quit neighbouring Angola last year.

Idas, which has close links with Washington, clinched a lucrative security and mining deal with the Angolan government which helped cut Angolan rebels Unita off from the support and rear bases Mobutu provided them. America Mineral has been exploiting mining concessions in north-western Angola on behalf of Idas.

To add to Anglo's woes, a deal which has been in the offing since May 1995 - to partially privatise the Zairean state mining company Gecamines to the international consortium Swipco, in which Anglo has an indirect stake - now seems uncertain while the rebel alliance maintains its distrust of Anglo and De Beers. Reportedly signed at the time between an adviser of Mobutu and, among others, Anglo's Nicky
Oppenheimer, it was delayed after World Bank objections.

De Beers and Anglo have not been the only ones to lose out. Already, under Mobutu, Gencor and Iscor failed in their bid for the $1,8-billion Tenke Fugurume copper and cobalt project, also in Shaba. It went to a Canadian company.

A Johannesburg investment analyst this week said Anglo and De Beers had been hamstrung in the
scramble for a post-Mobutu Zaire by their corporate nature: "They can't ever be seen to be dealing with anybody other than the appointed government ... because of their size and reputation."

But he said: "Kabila is the power now, so [they] will have to get on with him."

The scramble for Zaire highlights how central the country's vast mineral potential is to the war. It also shows South Africa is not a completely disinterested party in the negotiations it has helped mediate between representatives of Mobutu and Kabila.

But so far, even though President Nelson Mandela's government has made no secret that it wants to see Mobutu go, there appears to have been no visible spin-off for South African business interests.

Said the analyst: "A lot depends on how Kabila gets on with Mandela."



Reason to smile: Laurent Kabila has laid out conditions
for De Beers to negotiate continuing business in Zaire



Anglo's Julian Ogilvie-Thompson: Lost out
this week on a $1-billion tender for a copper and cobalt
reclamation project







Lost the point: Zaireans accuse Mobutu Sese Seko of
sucking his country dry, and De Beers of helping him

RELATED ARTICLES

*Looking beyond Mobutu *Foreign business courts the
rebels *Rebels mop up as Mobutu
guards flee (April 11)
*Cheers as rebels take Lubumbashi
(April 10) *Zaire rebels capture diamond
city (April 8)
*Understanding Zaire's rebels (April 2)
* A shudder in Kinshasa as Mobutu returns
(March 25) * A frail Mobutu meets Mbeki
(March 25) *ZAIRE: Mobutu's men stare
defeat in the face (March 18)
* French calls for Zaire force spurned
(March 14) * Zaire anger as US snubs
French plans (March 13)
* Kinshasa awaits the 'great liberator' Kabila
(March 12) * France and Zaire: Genocide,
or doublespeak? (March 11)
*For more articles on Zaire, check our Zaire archive

CYBERSPACE

*Zaire Watch *Zaire: A Perspective
*Anglo American



Prev | Next | Contents