Biti may boycott trip to China to seal fraudulent deal

Zimbabwe's Finance Minister Tendai Biti is likely to boycott a forthcoming trip to China to tie up a controversial $3-billion platinum deal which has provoked a political storm.

Government insiders and diplomatic officials say relations between Harare and Beijing could become strained if Biti snubs the talks.

China is anxious to secure huge platinum deposits in Zimbabwe worth about $40-billion for a market price of $3-billion. This has angered Harare officials, who think the Chinese want to swindle the country.

Government officials say the Asian economic giant thought it could stampede the country into the deal because it desperately needs funding to revive the economy.

"The problem here is that China, the world’s second largest economy, thinks it get can railroad Zimbabwe into this deal because it is bankrupt, flat broke and desperate," a senior government minister said.

"However, this deal is so dodgy and scandalously unfair that it eventually amounts to a major rip-off."

A senior Asian diplomat told the Sunday Times on Friday that Biti, who has confirmed talks were on about the deal, was angry with the Chinese for trying to grab its mineral resources. The diplomat said the minister considers the Chinese offer as a "grave raw deal".

"After the Export-Import Bank of China (China Eximbank) recently offered Zimbabwe the $3-billion financial package, Biti was expected to travel soon to Beijing to finalise the deal with authorities there. Discussions have been going on for a while now, but Zimbabwe is very unhappy with China over this issue," the diplomat said.

"Now we hear that Biti is not going to China because he feels the transaction is a fraud. He thinks the Chinese want to rip-off Zimbabwe because they know the country is broke and would not in their view refuse that amount of money. Biti is really disturbed and troubled by the deal. He thinks it’s a scam."

Biti refused to comment on whether or not he would be going to Beijing, only preferring to say "we are still in talks with the Chinese".

China, which considers Zimbabwe a disaster zone even if it is a convenient political ally, has been gradually invading the country economically.

The Chinese have taken over mineral resources, including diamonds, gold, coal and chrome, farms, companies in different sectors of the economy, shops and even flea markets.

This has created undercurrents of resentment in Zimbabweans and discomfort in official circles.

China, which supplies the country with military hardware and ammunition, has extended Zimbabwe credit loan facilities for the procurement of agro-chemicals, agriculture equipment and tools and animal health products. China Eximbank financed these deals.

The bank recently approached Zimbabwe, offering a $3-billion financial master-loan-facility in exchange for platinum deposits in the Chegutu area. The platinum deposits in the Selous and Northfields concession, which covers 110 square kilometres amount to 30 million ounces. This translates into about $40-billion at current market prices.

Biti is also said to be upset by the conditions of the deal. The Chinese have set stringent conditions, which include mortgaging platinum deposits, revenues from Chiadzwa diamond mining activities and tollgate fees.

"Biti thinks these conditions are punitive. He is asking how can a government which is broke like ours mortgage crucial streams of revenue like Chiadzwa and tollgates?" a senior government official said. – Timeslive