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DE RUEHSB #0012/01 0110651
ZNR UUUUU ZZH
R 110651Z JAN 10
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 5289
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHAR/AMEMBASSY ACCRA 3243
RUEHDS/AMEMBASSY ADDIS ABABA 3354
RUEHRL/AMEMBASSY BERLIN 1777
RUEHBY/AMEMBASSY CANBERRA 2611
RUEHDK/AMEMBASSY DAKAR 2981
RUEHKM/AMEMBASSY KAMPALA 0042
RUEHNR/AMEMBASSY NAIROBI 0044
RUEHGV/USMISSION GENEVA 2512
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEHAAA/NSC WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000012 
 
AF/S FOR B. WALCH 
ADDIS ABABA FOR USAU 
ADDIS ABABA FOR ACSS 
NSC FOR SENIOR AFRICA DIRECTOR 
STATE PASS TO USAID FOR L.DOBBINS AND J. HARMON 
COMMERCE FOR ROBERT TELCHIN 
 
SIPDIS 
 
E.O.12958: N/A 
TAGS: PGOV PREL ASEC PHUM ECON ZI
SUBJECT: ZIM NOTES 01-08-2010 
 
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¶1.  SUMMARY 
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Vacations Delay Negotiations... 
Diamond Sale Announced Then Cancelled... 
MDC-T Investigating Corrupt Ministers... 
Zim Ambassador Invades Malaysian-Owned Farm... 
Teachers and Mine Workers Threaten Strikes... 
Michael Jackson's Ghost Sighted in Zimbabwe... 
Counterfeit US$50,000 Found in Toilet... 
Gono Sells Own Bank to German Investors... 
Electricity Utility Seals a Deal with Botswana Power Company... 
Mobile Phone Giant in Talks with State-Owned Mobile Operator... 
Economic Woes Take their Toll on Redcliff Town... 
 
--------------------------------- 
On the Political and Social Front 
---------------------------------- 
 
¶2.   Most Zimbabweans remained on vacation this week. President 
Mugabe is rumored to be in Asia and Prime Minister Tsvangirai has 
been in Dubai and the Seychelles. The principals are expected to 
return mid-January at which point they and their negotiators will 
attempt to resolve the remaining outstanding issues: the 
appointments of Gono, Tomana, Bennett, and the governors. Parliament 
will also re-open mid-January. 
 
¶3.  On Thursday The Herald announced that Mbada Diamonds, one of the 
companies currently digging in the controversial Marange diamond 
fields, was planning to sell 300,000 carats (approximately 60 kgs) 
of diamonds in an auction on January 7 to international buyers. This 
came as a surprise since the Kimberley Process action plan on 
Zimbabwe that was signed in November stipulated that no diamonds 
could be exported without approval of a monitor, who has not yet 
been designated. In a quick about-face, announcements late Thursday 
cancelled the sale, with the Deputy Minister of Mines Murisiwi 
Zwizwai explaining that the government was not aware of the sale and 
had not approved it. 
 
¶4.  The MDC-T announced that it has set up a 13 member team to 
investigate reports of alleged corruption by three of its (unnamed) 
cabinet ministers, several law makers, and councilors and vowed to 
dismiss those found guilty. Recently the party took drastic measures 
to weed out corruption from its ranks and dismissed the mayor and 
suspended a councilor from Chitungwiza. The party announced that it 
will adopt a code of conduct that will require its ministers, 
legislators, and councilors to declare their interests and assets as 
a measure to fight corruption. 
 
¶5.  On Tuesday, Zimbabwe's Ambassador to Tanzania, Edzai Chimonyo, 
was ordered by the High Court to vacate a banana plantation he 
occupied over the festive season in Manicaland, but the retired army 
general refuses to leave the farm. The property, Fangundu Farm, 
southeast of Mutare, is owned by a Dutch and Malaysian company and 
is protected by a Bilateral Investment Promotion and Protection 
Agreement (BIPPA). Chimonyo has reportedly ordered armed soldiers 
onto the property and has begun harvesting bananas in spite of 
Tuesday's High Court order. A Lands Ministry official in Mutare 
described the High Court ruling as "just a piece of paper." 
Qdescribed the High Court ruling as "just a piece of paper." 
 
¶6.  Demanding increased salaries, teachers' and mine workers' unions 
are threatening to go on strike. Teachers from both of the major 
teachers' unions have reiterated their demand, which they've been 
making for the last year, for a wage that complies with the poverty 
datum line, most recently estimated at US$600. The next semester is 
scheduled to begin on Tuesday January 12. Like other civil servants, 
most teachers make US$150 per month. Similarly, the Associated Mine 
Workers' Union of Zimbabwe is threatening to strike after failing to 
reach an agreement with the Chamber of Mines. The Chamber said they 
 
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were only prepared to pay a minimum wage of US$80, a reduction from 
the previous minimum wage of US$100, while the mineworkers were 
demanding a minimum wage of US$200. 
 
¶7.  Just when we thought we'd heard it all, we learned this week 
that The King of Pop has chosen a Catholic girls school in Harare as 
his preferred haunting grounds. According to press reports, during a 
nativity play at St Mary's Mission School, children dressed as Mary, 
Joseph, and the Wise Men were on stage when suddenly the lights went 
out, then a "ghost-like being" appeared on stage waving a 
white-gloved hand. The terrified students emptied the hall along 
with the supervising nuns. Almost all students later agreed that it 
was Michael Jackson. "It definitely was MJ" noted Theresa, a student 
at the school. "It was his face and his clothes. He smiled and waved 
at us." We're not convinced, but this is Zimbabwe, where anything is 
possible. 
 
¶8.  In other "even we can't make this up" news, a Harare man was 
arrested after he was found hiding fake bills totaling US$50,000 in 
a toilet at a stationery shop, according to The Herald. This is one 
of several recent arrests of producers and dealers in counterfeit 
currency. 
 
----------------------------------- 
On the Economic and Business Front 
---------------------------------- 
 
¶9.  In a rare spasm of efficiency, Reserve Bank of Zimbabwe (RBZ) 
Governor Gideon Gono approved in record time the sale of 54 percent 
of a local financial institution, Premier Bank, to German investors. 
It happens that Gono and an ally were Premier Bank's main 
shareholders. The deal worth US$6 million saw the RBZ unilaterally 
fast-tracking a waiver on Zimbabwe's stringent banking and 
indigenization policies to allow foreigners a controlling stake in 
order to facilitate recapitalization. Gono and his crony, RBZ 
supervision chief Norman Mataruka, reportedly owned 50 percent of 
Premier Bank, with a further 4 percent belonging to Mataruka's 
brother-in-law. 
 
¶10.  The Zimbabwe Electricity Supply Authority (ZESA) has entered 
into a contract worth US$8 million with the Botswana Power Company 
that will see it revive the Bulawayo Thermal Power Station. 
According to ZESA, the deal will enable the company to produce 90 
megawatts of electricity with 40 megawatts being exported to 
Botswana while the remainder will be consumed locally, thereby 
reducing load shedding. 
 
¶11.  According to a report in the Financial Gazette, MTN has set its 
sights on acquiring a significant stake in Zimbabwe's state-owned 
mobile phone provider, NetOne. Although NetOne executives have 
refused to comment on developments, officials from MTN have been 
camped at NetOne's offices for nearly a month now. Many analysts 
believe that a deal is imminent. 
 
¶12.  The town of Redcliff in the Midlands has reportedly collapsed 
following the closure of the town's main industry, Zimbabwe Iron and 
Steel Company. Most companies operating in the town have stopped 
QSteel Company. Most companies operating in the town have stopped 
paying local taxes to the Redcliff council, citing viability 
problems, while residents are also not paying because of difficult 
economic conditions. As a result of these problems, the Town Council 
is failing to settle its bills with electricity and telephone 
services providers ZESA and TelOne. 
 
----------------- 
Quotes of the Week 
----------------- 
 
¶13.  "The entire process of mining, transportation to marketing is 
being done in compliance with the requirements of the Kimberley 
Process." -- Robert Mhlanga, Chairman of Mbada Diamonds, The Herald, 
 
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January 7, 2010. 
 
¶14.  "The due process for selling diamonds produced in Zimbabwe 
involves the Minerals Marketing Corporation of Zimbabwe, ZRP 
Minerals Unit, the Ministry of Mines and Mining Development, and 
Zimbabwe Mining Development Corporation where diamonds from Marange 
are concerned... In the case of Mbada Diamonds, this process is yet 
to happen." 
 -- Ministry of Mines Permanent Secretary Thankful Maskukutwa, 
 The Zimbabwe Independent, January 8, 2010. 
 
 RAY