Chinese investments in Zimbabwe’s extractive sector, a double-edged sword

A recent report by the Centre for Natural Resource Governance (CNRG) casts a shadow over the “all-weather” relationship between Zimbabwe and China revealing a troubling pattern of environmental degradation, disregard for local communities and cultures, and exploitative labor practices linked to Chinese-owned mining operations.

While the Southern african country celebrates crucial progress on long-stalled infrastructure projects and a vital influx of capital, the report raises serious concerns that the benefits are not trickling down to local populations and that the exploitation of the nation’s natural resources is coming at a steep social and environmental cost, demanding a critical reassessment of this increasingly dominant economic alliance.

The report titled “INVESTMENTS OR PLUNDER?: An Assessment of the Impacts of Chinese Investments in Zimbabwe’s Extractive Sector” highlights the tangible impact of Chinese capital on Zimbabwe’s infrastructure.

Long-stalled projects like the Matabeleland Zambezi Water Pipeline, which promises to deliver water to two million people, and the Kunzvi Dam for Harare are now taking shape with substantial Chinese funding.

This progress in infrastructure, after decades of stagnation, is a visible benefit of the “all-weather” relationship touted by Zimbabwean politicians.

The report underscores China’s effectiveness in injecting FDI into the Zimbabwean economy, especially during periods when other investment sources dwindled. Annual FDI from China saw a significant jump from under US$50 million between 2008 and 2010 to over US$460 million in 2011.

This investment has been concentrated in key sectors such as agriculture, mining, construction, trade, and tourism, with notable involvement in the tobacco sector through companies like Tianze.

The report also points to a substantial increase in overall Chinese investment in recent years. Fast African reported over US$2.5 billion by the end of 2021, and the Zimbabwe Investment and Development Agency (ZIDA) noted a doubling of licenses issued to Chinese investors in 2023 compared to the previous year.

“This surge in investment solidifies China’s position as Zimbabwe’s preferred investment partner, particularly in the mining sector. Chinese investors have a strong presence in the burgeoning lithium sector, which has experienced rapid growth due to the global demand for this mineral in the green energy transition,” the report stated.

The report, however, casts a critical light on the negative consequences accompanying this influx of Chinese capital, particularly for local communities in resource-rich areas.

The benefits of mining investments, the report argues, have largely failed to trickle down to the local population. Instead, Chinese capital often manifests as imported mining equipment entering the country duty-free.

The report also cites instances of Chinese nationals being arrested for illegal cash holdings and externalization of funds.

A significant portion of the report details the detrimental ecological footprint of Chinese mining operations, characterised by severe environmental degradation, disregard for local cultures, and appalling labor practices.

CNRG highlights accusations of Chinese companies operating with impunity, flouting regulations, and perpetrating various forms of violence against local communities.

The extraction of non-renewable resources under these conditions raises serious questions about the long-term sustainability and ethical implications of these investments.

The report provides disturbing accounts of alleged abuses, including a 2020 incident where a Chinese national shot two employees demanding wages and an accusation of a Chinese-owned company burying artisanal miners alive.

The report further points to the outlawed practice of mining along river beds by some Chinese companies, causing environmental damage.

Despite numerous reports of labor abuses, the report claims that the Zimbabwean government has taken little action to investigate and address these complaints.

“For instance, despite numerous cases of rampant abuse of locals. employees by Chinese employers, no measures have been taken by the government to investigate and address these labour-related complaints.

“In 2020, a Chinese national named Zhang Xuelin shot two employees at Reeden Mine in Gweru as the workers demanded their legitimate outstanding wages.

“A Chinese-owned mining company, Xu Zhong Jin, allegedly buried alive two artisanal miners in one of its shafts in Penhalonga Mutare.

“The Penhalonga incident happened whilst the company was extracting alluvial gold ore from the Mutare River, practices that are outlawed by the government to mine along riverbeds, banks, and wetlands,” the report stated.

The CNRG delves into the reasons behind Zimbabwe’s reliance on Chinese investment, highlighting the country’s “all-weather friend” status with China, a relationship solidified after Western nations ostracized Zimbabwe in the early 2000s.

The “Look East Policy” subsequently attracted Chinese investors who, according to the report, have capitalised on the Zimbabwean government’s perceived desperation. This has led to an asymmetry in economic benefits, with concerns raised by former Deputy Prime Minister Arthur Mutambara about Zimbabwe needing to be more “shrewd” in its dealings with China and diversify its investment partners.

The report emphasises China’s growing dominance in Zimbabwe’s mining sector, estimated at 90%, with a preference for open-cast mining methods that often lead to land grabbing, water scarcity, cultural heritage desecration, deforestation, and pollution.

The focus on critical minerals like lithium has seen a surge in Chinese investment and mining activity. While these investments have created jobs, the CNRG report highlights labour conditions characterized by short-term contracts, poor job security, low wages, lack of benefits, and unsafe working environments.

Workers’ testimonies shared during CNRG workshops detail allegations of discrimination, sexual harassment, and corruption by Chinese employers, leading some to view the mining industry as a new form of “colonization and slavery.”

The CNRG report paints a picture of an “unfriendly, adversarial and fraught with mistrust and deep suspicion” relationship between Chinese-owned extractive companies and local communities. The report suggests that the perceived impunity enjoyed by Chinese investors stems from their role as “kingmakers and guarantors of the Second Republic,” implying a quid pro quo where access to Zimbabwe’s natural resources is granted without adequate oversight.

Drawing parallels with other African nations, the report notes a growing continent-wide disgruntlement over Chinese investments, often leading to community divisions and strained government-citizen relations.

Good governance watchdogs, the report states, observe that China often negotiates unfair deals that exploit African governments’ weaknesses, fostering corruption and wasteful decision-making, and perpetuating a neo-colonial relationship.