Zimbabwe's Mugabe exchanges gold and diamonds for fuel

Sources in Zimbabwe say Robert Mugabe’s Government has entered into a deal with Libya and Iran to procure fuel supplies against future deliveries of gold and diamonds.

Zimbabwe's isolated President Robert Mugabe, who last week reaffirmed the government's bid to assume full control of the country's minerals and mining sector, has mortgaged the country's diamond and gold resources to Libya and Iran for the procurement of bulk fuel supplies, Mineweb can report.

Sources within government revealed Tuesday that the Zimbabwean government had struck a deal with unnamed partners in Libya and Iran for the procurement of bulk oil in exchange for diamonds and gold.

The unnamed partners, the sources said, have links and connections with the governments of Libya and Iran.

"Our government has made a deal with some partners in Iran and Libya for the procurement of oil but this will be in exchange for gold and diamonds," said the source, speaking strictly on conditions of anonymity.

This, the source said, is why the government has made a fuss about going it alone in mining diamonds at the Marange diamond fields. About a month ago, media reports indicated that Zimbabwe's information and publicity minister, Dr Sikanyiso Ndlovu had said government would not seek partners to mine diamonds. Consequently, the Zimbabwe government declined a US$ 200 million German investment in the mining of the Marange diamonds.

Following this development, the government then mandated the Minerals and Marketing Corporation of Zimbabwe (MMCZ) to mine the diamonds at Marange. The Central Bank head, Dr Gideon Gono slammed the MMCZ in his Monetary Policy presentation. He said the parastatal had no capacity to mine the diamonds at Marange.

The fuel, which will be procured through diamonds and gold is now at Feruka, the sources said, adding: "It is quite a huge amount of fuel that it will last for a long time should the deal stand".

Last year, unconfirmed reports indicated that Mugabe had made a deal with a Libyan firm for the importation of fuel to bail out the country's ever- squabble dogged fuel sector. 

Observers and analysts said the move to hedge the country's mineral resources could be "Mugabe's latest self cushioning antic ahead of next year's harmonised presidential, parliamentary and local government polls" scheduled for March.

Mugabe is known for his survival antics, especially ahead of elections, which could prove a landmark in the history of the mineral-rich Southern African nation. The fuel, observers and sources maintained, will be used in Mugabe's Zanu PF campaigns for next year's polls.

Zimbabwe is currently in the throes of a fuel crisis, which has culminated in 24-hour long queues at service stations.

Efforts to get a comment from Zimbabwean officials proved fruitless as there was no-one willing to speak out officially, on the issue.

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