China’s important commercial and diplomatic ties to Zimbabwe grew stronger this month as Zimbabwe agreed that the yuan should become a legal currency within the country and that Chinese solar industry interests could construct innovative plants.
Since 2009, when use of the wildly-inflated Zimbabwe dollar was abandoned in place of the U. S. dollar and the South African rand, Zimbabwe’s macro-economy has functioned comparatively well. Consumer goods, long absent from market shelves, returned and the country’s earners were grateful for wages that did not quickly vanish in value. (From 2006 through 2009, Zimbabwe’s inflation rose to levels not experienced since Weimar Germany in the 1920s – to an astounding high of 6.5 sextillion percent in mid-2008.) Admitting the yuan into the charmed circle of legal tender (along with the Euro, the British pound, Indian rupee, Japanese yen, Botswanan pula, and the Australian dollar) acknowledges China’s increasingly major role in Zimbabwean business and China’s imposing political relevance.
Although some observers may see the legalization of the yuan and other Chinese commercial developments as threats to American and European interests in Zimbabwe and in the region, Washington and Brussels in fact welcome anything that encourages embattled Zimbabwe to look outward. Chinese influence should help to modernize and uplift Zimbabwe, even under the autocratic presidency of Robert Mugabe.
Zimbabwe’s abundance of industrially-significant minerals has long attracted China. After South Africa, Zimbabwe is the world’s premier producer of platinum. It also mines ferrochrome and has large supplies of coal. Gold is another metal long panned and dug in the country. Since 2006, Zimbabwe has also become one of the world’s largest exporters of gem and industrial diamonds, many of which are destined for China. Anjin, a well-placed Chinese company, mines diamonds from the Marange fields in eastern Zimbabwe in cooperation with highly-placed Zimbabweans close to Mugabe. Because of those strong ties, Anjin’s diamonds often are exported directly to Dubai and Hong Kong without being officially accounted for in Harare, Zimbabwe’s capital. From 2006 through at least 2013, Zimbabwe’s treasury believed that it was receiving less than 10 percent of the royalties due it from diamonds.
After South Africa (and in-country elite investments channeled via the British Virgin Islands and Mauritius), China is the largest outside investor in Zimbabwe’s mining sector. Anjin invested nearly $500 million in 2011 to enlarge its diamond diggings and may have increased its investment totals along with added capacity in the ensuring years. Other Chinese companies are eyeing possible investments in platinum and gold, particularly since the Zimbabwean government has been anxious to lessen the hold of South African and British investors in both sectors.
As another indication of China’s confidence in Zimbabwean prospects, the Powerway Renewable Energy Company of China is now prepared to invest at least $160 million in the construction of a 100 megawatt solar power plant about 150 km from Harare. The plant will be modeled on a smaller solar installation that Powerway has constructed in Japan, near Higahiloshima. Powerway also has facilities in twenty-one other countries. Powerway has agreed to partner with Mobility Holdings of Zimbabwe, which specializes in renewable energy projects.
When fully operational, the 100 megawatts of solar generated electricity will feed into a national grid, helping to relieve Zimbabwe’s chronic shortage of power. Even Harare and Bulawayo, the country’s two largest cities, are subject to frequent blackouts and enforced load-shedding events. Parts of Harare now receive electric power only a few hours of each day. Businesses and many households rely on private generators.
Installing the Powerway plant in Zimbabwe will take about a year, depending on its exact location. But it will have to occupy about 400 hectares, and its construction will employ 600 local and Chinese workers. Once this first plant is up and running, Powerway and Mobility intend to seek locations for additional solar arrays.
Currently, the only sizable – and still experimental – solar array in southern Africa is in northwestern South Africa. Both countries, and most of Africa, are blessed with abundant year-round sun. But, until now, Africa (and Zimbabwe) has largely relied on thermal power from inexpensive coal and from hydroelectricity generated from fast-flowing rivers like the mighty Zambezi on Zimbabwe’s northern border. Under Mugabe, Zimbabwe under-invested in maintaining those facilities and its shortages reflect decades of decay and the nation’s current poverty. Providing transmission lines are strung, the Chinese solar array should help relieve at least some of those continuing shortfalls.
China has been close to Mugabe for many years, supplying equipment and uniforms to the security forces and constructing a military intelligence center in Harare. A Chinese firm is also building a highway to connect Maputo, neighboring Mozambique’s capital, to Harare, and engaging in other artery construction throughout the country. Its farmers grow maize and rice on leased land, too, for export home to China.
Published under the same title in China-US Focus, http://www.chinausfocus.com, Feb. 15