Online Reporter
Tichaona Zindoga
Correspondent
Recently, respected economist and political figure, Eddie Cross, wrote a polemic article on his blog titled, “What is the Chinese Motivation in Zimbabwe”, that has since gained notoriety and circulated widely in public discussions.
Cross’ article would be of so much value for a rational public debate on the nature and dynamics of Zimbabwe’s economy and investments, were it not for a number of exaggerations, factual errors and misinformation, which had the effect of poisoning and polarising the minds of his readers.
Mr Cross wrote: “What on earth are they (Chinese investors) doing here? They are not migrants; they all want to go home eventually…They have targeted us for raw materials for the industrial monster at home. We have lots of targets — the largest iron ore deposits in the world, plenty of limestone and coal so we can make steel. They need to move steel production away from China to avoid US and European trade restrictions and to move dirty, polluting industry to the pristine blue skies of Africa.”
He then made a number of alarming assertions and misrepresentations, many of which were not just misleading, but also patently racist, xenophobic and inflammatory.
This should not go unchallenged. This article exposes and challenges a number of areas where Cross got it fatally wrong, which, if untested, could pass as fact and poison the minds of Zimbabweans and discourage foreign investors.
Immigration
Cross begins his article by claiming that he was “astonished to hear” that “there are now over 85 000 Chinese now living in Zimbabwe”. This is not factual.
A few months ago, the Minister of Home Affairs and Cultural Heritage Kazembe, disclosed in Parliament that there were around 25 000 Chinese expatriates working and living in Zimbabwe, with the majority of investors concentrated in the mining industry. Minister Kazembe emphasized that the government is committed to attracting investment.
It is worrying that Cross inflated the immigration figures apparently to incite xenophobia on an imagined invasion by Chinese people. This is also cynical in that it seeks to delegitimise and dehumanize Chinese investors, whom Zimbabweans must be embracing in the spirit of friendship and economic cooperation.
Gold, chrome and diamonds
Cross claims that, “A quarter of our gold output goes to China and we have no idea about how they are doing that or what is involved”, insinuating that the mined gold is being plundered and smuggled to China.
This generalisation is dangerous because it does not have basis on fact. From my research, Zimbabwe’s authorities report that Zimbabwe produces nearly 40 tonnes of the metal — 30.1 tonnes in 2023 — worth nearly US$4 billion, and 60 percent of it is produced by artisanal miners. The gold is sold mostly to Fidelity Refineries, which exports the majority to the United Arab Emirates, the largest importer of the commodity. The UAE, is, in fact Zimbabwe’s second largest export destination after South Africa. China comes third.
The economist then accuses Chinese companies of “exploiting our finest coal reserves for their smelters and steel production, even exporting their surplus”, as though this economic activity, which is supporting local industry and earning foreign currency at a time local producers, including the state-owned Hwange Colliery Company, have been saddled with sanctions-induced incapacity, were a crime.
In the diamond sector, Cross claims that only a single Chinese company linked to what he calls the “Red Army”, is involved in mining diamonds in the east of the country, when a number of companies, including one owned by Russians, were bundled into a single entity called Zimbabwe Consolidated Diamond Company under Government control.
Regarding Chinese involvement, in Anjin — the joint venture company jointly established by Anhui Waijin Construction and the Ministry of Defence — the Zimbabwean side holds 50 percent of the free shares by virtue of resources. From the board of directors to the management, both the Chinese and Zimbabwean sides participate in the joint management in proportion, and the Zimbabwean side occupies the vast majority among ordinary employees. So far, a total of US$800 million has been invested in Zimbabwe, and all the procedures are legal and proper.
The company has gone on to build nearly 500 resettlement houses in the area, and schools, hospitals, police stations, churches, etc. have been equipped. In 2016, the authorities forcibly shut down the diamond mine, which then led to large-scale destruction and theft, and it has not yet recovered. There is nowhere to appeal for these losses, and they can only be borne by the owners themselves. Interestingly, Cross “estimated” the output value at US$30 billion, without any basis.
To whip up emotions, Mr Cross misleads his readers that Zimbabwe has the “best Chrome deposits in the world, 9 billion tonnes of it worth a conservative US$100 trillion”.
Research indicates that South Africa has the largest reserves of chromium ore in the world, accounting for about 75 percent of the world’s reserves. Zimbabwe’s chromium ore reserves account for 12 percent – 19 percent of the world’s (there are certain differences in statistics from various sources). The total reserves are less than about 1 billion tonnes. However, the vast majority of chromium ore resources are pod-shaped or nest-shaped ores, without thick and large ore bodies. The mining is rather difficult and the mining cost is high, and the transportation cost is even higher. According to empirical data, currently, the chromium ore reserves in Zimbabwe that are truly valuable for mining are around 100 million tons, and it also depends on market conditions. The price of high-quality chromium ore is about US$260 per ton, and it decreases by about $20 – $25 for each grade area. That is to say, the maximum value of Zimbabwe’s mineable chromium ore is $26 billion. How could it be $100 trillion?
Lithium
On the other hand, with respect to lithium exploitation, Cross misses two fundamental dynamics in the industry, namely ore processing capacity and concentrate production capacity. Ore processing capacity and production capacity are often confused. In the article, ore processing capacity (which is easily confused by most people, including those in companies when expressing it) is wrongly regarded as concentrate production capacity. For example, a Chinese lithium company in Zimbabwe has one production line for processing 4 million tons of spodumene and petalite annually, with an annual output of 600 000 tonnes of concentrate. The current export price of spodumene concentrate is about US$800 per tonne, and the price of petalite concentrate is about US$400 per tonne.
Now, the unprocessed lithium is banned to export. About 1 million tonnes of lithium concentrate export from Zimbabwe in 2024, equivalent to $800 million in value totally. The destinations included China, Europe and South-east Asia countries. What’s more, the major Chinese lithium producers in Zimbabwe have proposed plans to set up lithium sulphates (salts) processing in the country, which constitutes value addition suitable for the local conditions and market. The economist however, chooses to ignore these dynamics and developments in the industry, choosing to raise malicious and unfounded allegations that, the exported lithium “might contain other metals and minerals worth many times more”, something that would do well as bar talk and deplorable coming from the pen of a respected figure.
Electricity generation investment
Another misleading claim by Mr Cross is that Chinese-built Hwange Power Station electricity output is being charged to the Government at three times the normal cost. This is seriously inconsistent with the facts. In Zimbabwe, the electricity price of coal-fired power generation is generally US$0.8 per 10 million kWh. Due to the construction of a 360km long 400KV transmission line for the Hwange Project, this cost has also been included in the electricity price, so it is US$0.916 US per 10 million kWh. Of course, when the national power company sells electricity to mining enterprises, the price is definitely not at cost, that is, US$0.916. A certain amount of profit will be added, but it definitely has not reached the level as described in the article that “the cost per megawatt of the power station newly built by China in Hwange is three times that of their own power plants”.
Crossing the t’s…
Mr Cross’ article raises serious questions about his intentions, especially when it was presented in a brazen and barely-varnished inciteful and hate-filled racist profiling of foreign investors, that happen to be Chinese whose only crime, it appears is answering the President’s call that, ‘Zimbabwe is Open for Business’. The author, it appears, is at cross-purposes (no pun intended) with the national interest of Zimbabwe.
A real analysis worth considering is one that accurately crosses the “t”s and dots the “i”s to educate, inform and positively influence national policy not incite hatred and xenophobia towards foreign investors and question why they come to our shores.
Chinese investors are corporate citizens, operating within the confines of the law, with the same legitimate rights as any colour and manner of businesspeople, while Chinese people who decide to come and settle enjoy the rights afforded to anyone in terms of the law.
- Zindoga is the Director of Ruzivo Media and Resource Centre think tank that analyses global and local issues.
daniel chigunwe
