Striking it rich in Cabo Delgado
But anger over human rights abuses in the rubyrich province fuels resentment and insurgency
Last month, the Maputobased NGO the Public Integrity Centre (CIP) published a study showing that requests for mining concessions in Cabo Delgado province have increased in tandem with the raging armed conflict.
The biggest single holder of concessions is Mwiriti Mining, owned by retired general Raimundo Domingos Pachinuapa and his Iranian business partner Asghar Fakhraleali. Their company owns 7% to 10% of the concessions in the province.
Pachinuapa is a veteran of Mozambique’s struggle for independence from Portugal, and a senior figure in the ruling Frelimo party. A member of the Makonde ethnic group to which President Filipe Nyusi belongs, Pachinuapa was governor of Cabo Delgado between 1980 and 1983.
His company rose to prominence after the discovery of a vein of rubies in 2009, in Namanhumbir, in the Montepuez district, since described as “the most important ruby discovery of this new century” by the Gemological Institute Of America.
Mwiriti took control of the 33.6-hectare area, and in 2011 formed Montepuez Ruby Mining (MRM), a joint venture between Mwiriti, with 25%, and Gemfields, which owns 75%.
Despite formally having capital of just 30 000 meticais (about $1 000), and without any prior capabilities for exploitation of mineral resources or experience of the international market for precious stones, Gemfields paid Mwiriti $2.5-million for 75% in the joint venture.
Year after year MRM has been selling gems in international markets at huge profit, but not without controversy. Videos surfaced in 2012 following the torture of illegal miners by Mozambique’s security forces.
People in Cabo Delgado believe some of those youths who were treated brutally in Montepuez might have been recruited by the Islamic insurgents to join their ranks. In 2019, Gemfields agreed to pay $7.6-million in compensation to people living around its ruby mine in Montepuez, who allege they were the victims of human rights abuses by the police and Gemfields’ security guards.
The company did not admit liability, however, and said it had been “proactive and constructive in addressing the issues raised by local communities through this case”.
That year, Gemfields and Mwiriti announced a new joint venture to develop gold mines in Cabo Delgado.
MRM told The Continent it has “investigated carefully” suggestions that its project might have fed feelings of inequality and alienation that have fuelled the insurgency — and concluded that such a suggestion is “absurd and misleading”.
“Save for the recent arrival of internally displaced persons in the ruby mining areas, the area affected by the insurgency lies in the gas project areas, not in the ruby mining areas,” the company pointed out.
Meanwhile, artisanal mining continues on MRM’S concession, despite the best efforts of police and private security to crack down on it. MRM said it knew of 21 people who died while mining illegally on its concession in 2020, and a further eight by August this year, mostly due to the collapse of the mines they had dug.
In 2019, Mwiriti earned $17.9-million from auctioning rubies in Singapore, while Gemfields made $71.5-million. In June 2014, MRM sold rubies for $33.5-million at auction in Singapore.
Mwiriti has come a long way from the company registered to offer services in the areas of building, food sales, office equipment, general trading and lobbying. It was only in 2009 that it included “prospection, research, exploitation of mineral resources, import and export”.
But the Public Integrity Centre report raises another concern: the company has apparently shifted ownership of its mining concessions offshore, to a company called Nairoto
Resources Holding, domiciled in Mauritius — Africa’s tax haven.
That means, CIP pointed out, that “it becomes difficult [to] identify the beneficiaries of the concessions, which can be Mozambicans in conflict of interest,” or even “with power and political capacity to influence the dynamics of the sector”.
Where owners of Cabo Delgado’s mining concessions can be identified, however, the names of powerful families such as Chipande, Chissano, Talapa and Waty crop up — “easily identifiable with the country’s political elite”, as CIP says, showing that “a good portion of the concessions is owned by politically exposed people or directly linked to influential individuals from the Frelimo party, in power since Mozambique’s independence.”
Mwiriti issued a statement following CIP’S report saying that the use of offshore structures was legal, and mining activities are still carried out in-country. CIP’S researchers suggested, meanwhile, that the lack of transparency over who owns mining concessions “may be behind land conflicts” in Cabo Delgado — and that publishing the names “may minimise the occurrence of … conflicts.”
But if greater transparency only reveals the true extent to which Mozambique’s riches are concentrated in the hands of a privileged few, then deeper changes will be needed to overcome the resentment that is contributing to unrest in Cabo Delgado.
A good portion of the concessions is owned by politically exposed people or [those] directly linked to influential individuals