Betrayed friendship and the Death rubies

  By:Estácio Valoi Namanhumbir – Montepuez, northeast of Mozambique, in Cabo Delgado Province, is where for the first time a deposit of

 

By:Estácio Valoi

Namanhumbir – Montepuez, northeast of Mozambique, in Cabo Delgado Province, is where for the first time a deposit of rubies was discovered, later considered the biggest in the world. An area of considerable richness and royalties, the 33.,600 ha ruby mining concession is now currently owned 40% by the mining company Montepuez Ruby Mining/Gemfield (MRM) as the result of a joint-venture between the Mozambican Mwiriti with 25% and its British counterpart Gemfield with 75%.

In an on-going race held by multinationals such as Fura,  Montepuez Ruby Mining, New Energy, Gems Rock , Mwiriti, and Balama Graphite in Montepuez, Balama, and other districts controlling the red rubies, soils, and other minerals, local communities’ associations and citizens are left out, with no land left for mining or farming. Still ‘promises.’

Although the law prescribes that mining resources should first benefit local communities, this seems to fall apart. Instead, multinationals and their government associates keep accumulating millions and millions of dollars, where some don’t even pay taxes.

Most mining companies don’t contribute to Montepuez’ District. This fact was confirmed by Rhiade Abdul Gafur from the Internal Taxes Operations in Cabo Delgado. He said that the mining industry is helping to boost the local economy, but that 2019 was not the best year since the tax collection was 3.5 million Meticais below the planned target of 5.563. Meticais, This corresponds to a realization rate of 63.64%, a negative deviation of about 2 million Meticais, that is 36.36%. In the lead, Montepuez Ruby Mining is the biggest contributor in this unit, which channelled to the Government coffers about 26.34%, about 932.9 million Meticais from June to July in production taxes and personal income taxes (ISPC).

In the graphite area, TWIGG has been paying IRPS of the first category, the payment of non-residents for the acquisition or service and goods provision. IRPC delivery was considerably reduced because of the reduction on the number of workers and , according to its income statement, is still undergoing losses. Others are still in a prospection and survey phase, and only pay superficial taxes and insignificant production taxes, like FURA who in December channelled about 2 million Meticais. Mustang, although it operates in Cabo Delgado, contributes in general little to Montepuez, complying with its tax obligations in Maputo. REGIUS, handed in for the Government coffers about 263 thousand Meticais for the 2019 economic year for IRPS of first category. There is also Mwiriti, who like REGIUS, is still in a prospection and survey phase, Rhiade said.

From June of 2014, MRM started auctioning the Namanhumbir rubies, netting them a total 584.1 million USD. In 2019, the 13th auction in Singapore resulted in an income of 71.5 million USD. The growth, according to the finance department in Cabo Delgado, comes after the compulsive removal of millions of illegal miners, commonly known as ruby “garimpeiros/prospectors and smugglers” in Namanhumbir – Montepuez.

However, hostilities between artisan miners and mining companies continue, from spanking, to people being shot, dozens of deaths as a result of mines collapsing, detentions of the local prospectors in Montepuez’s jail and mining workers wounded allegedly by these local prospectors and a burned vehicle, chiefly at MRM’s concession.

Selemane is not the only one, however, who has suffered from his discovery of the rubies deposit  in 2009,  later  expropriated by General Raimundo Pachinuapa, – member of the Mozambique Freedom Front (FRELIMO) and ex-governor of Cabo Delgado Province, together with Asghar Fakhraleali, both owners of the company Mwiriti, Lda. This company came to join Gemfields later through a Joint-Venture, acquiring from the Mozambican authorities a license to mine an area of 33,600 ha, where Pachinuapa and his partner Asghar detain a participation of 25%, while Gemfields detains 75% (Montepuez Rubi Mining / MRM).

General Pachninuapa states that he paid for the rights to use the land, although this is refuted by the local organizations and management committee members in Namanhumbir, whose job is to educate the local population about their rights of use of the land as well as of the mineral resources. They said that “the general payed nothing”, describing the act as expropriation of land.

Local communities, citizens of a country rich in minerals that, according to the law, should primarily benefit Mozambicans, have instead suffered from discoveries such as that of Selemane.

Betrayed friendship

Selemane a poor and illiterate individual, who could not contest and demand his rights, in this unjust expropriation of Pachinuapa, even with binoculars still can’t envisage some of the millions of USD gathered by MRM, not to mention the promises made by his friend Ashgar that he would build him a house and give him a job. Instead he saw the world through bars, a ‘thief of rubies and enemy’, arrested in Montepuez jail for 35 days and only freed on the 3rd of March of 2020 after paying a bail of 40 thousand Meticais. This according to local sources in Namanhumbir.

On the 2nd of February of 2020, on an attempt to speak to Sulemane Assane via phone, a feminine voice answers and responds to my question saying: – I am Luísa, Sulemane’s wife. He was arrested in Montepuez’s jail by Ashgar and Raim Pachinuapa. I was there.”

The following day, after circulating around Namahumbir, on the side of the police station, our team arrived at Sulemane’s house. Luísa, his wife, and their three daughters aged between 2 and 8 years-old and a friend were sitting there. We spoke and both wife and friend confirmed what had already been mentioned. Sulemane had been in jail for two weeks, arrested – according to Luísa – by Asghar Fakhralealii and Raim Pachinuapa claiming that he had been digging rubies. Arrested in a jail where they  wouldn’t allow even his own wife to visit him. Except for being allowed to take him food, she hasn’t seen Sulemane since the first day he was arrested.

According to Luísa, before being taken to jail, Sulemane was first taken for a ramble in the area where the relocation houses are being built, then to the police station in Namanhumbir, to the clinic (the mining office) in Muapeia, the rcentre of the rubies, and finally to jail.

In an interview with Sulemane in November 2018, he kept “praying” for better days. Now, arrested or not, he sees the rubies going past in front of his eyes. Sulemane, “the plank splitter”, then told us the story of his discovery in the woods of Namanhumbir, when after walking a long distance, taken by “hunger and God”, he saw a red stone; – I took it to a white man named Ashgar, the owner of a field and he said that it was a precious stone (Rubi). Together with Ashgar, many people came to meet me in the bush. With Ashgar’s promises that he would help me in the mine, build a house for me and my family, Sulemane dreamt of bonanza days. But up to now he hasn’t complied with any of them: – I think that guy is a bandit because, with my life up to now, I am suffering.

Tom and Jerry! “When Ashgar sees me, he even gets upset, he arrests me in jail. He doesn’t like to see me. He says I stole 20 thousand Meticais from him. I can see the rubies being taken, my heart hurts! I thought things would improve. With the ruby, God was giving me an opportunity to have money for the rest of my life. But today they are eating my money and even say that I am crazy (psychopath),” said Sulemane.

“Friend Ashgar”, of the promises, “only brought me some zinc roof-sheets, planks, some bags of cement and the doors, material that the family used to build the house. Ashgar didn’t give us money. Sulemane is now in jail, they caught him in the bush. Now I’m here with these three daughters of mine. No one gives us food,” said Luísa while we were coming home.

Ruby, “a common or singular good?”

A “ common good,” not “exclusive,” says the finance provincial direction in Cabo Delgado. 2.75% of the income tax channelled to the National Treasure, as the production tax over Mineral Resources, are to “benefit” the communities where the resources are extracted.  , as the company increases its income by marketing the minerals, in this case  the rubies, the amount channelled to the communities should also increase.

The Mining Law (law no 20/2014), which intends to safeguard the national interests through tax dispositions, expects that the mining benefits must be extended to the communities in  this form of 2.75%. But the fact is that, since 2014, the communities never benefited, only the FRELIMO party/Government, as previously reported. The war on raiding the Montepuez rubies has, then, been a very agreeable one for Gemfields. We see  most of the guilt in a criminalized and cruel Mozambican State.

https://www.zammagazine.com/chronicle/chronicle-32/565-the-plunder-route-to-panama

As for Sulemane in Namanhumbir, many others  have the rubies as their source of livelihood. The 2.75% are not making a difference, which  makes them have to go back to the illegal mining so they can be able to buy soap, food and other necessities: “We also don’t have work, we just go and dig,” said the miners.

But the prospection is not done only by the so called “garimpeiros, directors, and elements of the police”, but  also by some mining companies like Mustang. In the first week of November 2017, we visited some mining areas, from the Ancuabe District heading to Montepuez, we crossed the Megaruma River through the Nemália Village. For about 2 hours we drove through the bush up to the other margin of the river by the same name, close to 5980 L where hundreds of local prospectors – “garimpeiros” – extract rubies, especially for Mustang, at the time with no license for it. Mustang has a facility in the area and supplies the equipment to the “garimpeiros” and was involved in ruby smuggling using cheap labour. In September 2017, Christian Jordaan, managing-director of MUSTANG,  promised but never sent the license as requested by ZAMMAGAZINE.

At the time,  community leader and hundreds of “garimpeiros” that we interviewed told us, and  we then  saw for ourselves in their facility, that there were many machines managed by a man in charge working for the mining company, . “ The chief  also speaks English and  came from Maputo”, who in exchange for buying the rubies would supply the equipment. “’You can carry on using our equipment to dig, then wash and sell the rubies to us (Mustang)’”. The washing was done in Megaruma River. “Mustang paid to open the road, is operating here and the local administrator doesn’t know.” Mustang said that later they will employ the prospectors. “Many white men are trying to get this mine. The Mustang men come from Montepuez”, and the community leader was told to keep his mouth shut and not inform the Chiure authorities, said the interviewed.

According to Fernando Jange, the Cabo Delgado Energy and Minerals Direction’s inspector-chief, the mining law prescribes that any licensed company in a prospection and survey phase, in this case of precious minerals, can sell them as long as subjected to taxes. After Mustang got its license, they did their first auction in Mauritius, but it didn’t go well. “I think that the person in charge of the auction didn’t select properly, gathering scrap minerals. So they only got at the time, if I remember well, about 600 or 700 thousand USD,” Said Jange.

But not all friendships were betrayed

The company and the State share the same interest, which is to minimize the illegal mining and smuggling by those not licensed for precious stones in Montepuez area. For the government, it means to protect their financial revenue and earning in foreign currency; for the companies it is a matter of protecting their growing profits. The previous “raids”, ejection of “garimpeiros”, foreigners and the communities that were transferred from their land intended to accommodate multinationals and important elements of the Mozambican politics, the  usual ones and some new .

Rubies and other mineral are “ all ours”

Fabergé-Gemfields, Fura Gems Inc, Mustang ( New Energy since mid-2018), Regius Resources, Gem Rocks, SRL Mining Limitada Mozambican generals, ministers are the main beneficiaries and soon  also Gemfields and Mwitiri, will launch a new partnership in gold mining company- Nairoto Resort.

And has  FURA stated in a right-to-reply letter,  “Mr. Shetty joined Fura in January 2017 as its President and Chief Executive Officer. Prior to joining Fura, Mr. Shetty was the group Chief Operating Officer and a board member of Gemfields Plc.” Also, “Fura has no past or current ownership interest in New Energy.” And adds that  “The only relationship between the two companies relates to an acquisition agreement entered into by Fura with New Energy, first publicly announced in July 2018, in which Fura agreed to acquire certain of New Energy’s ruby assets in Mozambique (the “Transaction”).

The new mining legislation and its respective approved and already in use directive in the decentralization framework, as well as the Mines National Institute’s constitution revision to include all acting areas and give priority to nationals as the first benefitting as the Inspector Fernando Jange says,  “ it must start at the community where most of the minerals are; the community must feel they are the owners and an integral part of the project, otherwise if the company works there without involving the community, the project might fail.”  This is not achieved yet.

The ghosts of yesterday continue to be the same today. From January to February of the current year, the war for the ruby with the so-called ‘garimpeiros’ from the communities  continues. Death by landslides, shootings, injured workers by the garimpeiros, a burned mining vehicle… Maningue Nice, MRM’s headquarters, was the epicentre. According to some garimpeiros, “Our government wants us to steal. There in Muapeia’s mine, Namahaka, was a place where we worked and didn’t think of other things. If we have to sit, with nothing to do, we will have to go and steal in our neighbour’s house. Here the stones are not bigger than there. We are here because the white took the place there. We ran away from there (from MRM/Gemfields concession).

“Now here also, in Mahate, they know we are extracting stones. They say there are associations, but they come with AKM guns, scare the population and the population goes out, even knowing that we all depend on that place. Another one is coming and occupying and we don’t have the stone as here, it comes out with colour but inside; it has problems , doesn’t have quality. Today the market is also difficult. The stone’s price is lowering; it depends on the buyers. They (police) grabs you, mistreats you, and takes you to jail; so things didn’t change for us,  it got worse.”

For example: – “Here we can work freely, but when the white realized there was stone, he came to occupy. At night he shoots uncontrollably. Is it a gun? We don’t know! Bullet is bullet; if shot aimlessly it might hit children that are there. It is Mustang (NEW ENERGY)  that is mining there.”

“Still  violence, bullets, people being spanked; that doesn’t stop; last week there were persecutions inside Montepuez Rubi Mining’s area and we could hear bullets soaring. We just don’t see people being shot that end up in hospital anymore. ,  said members of community  associations.

This fact was recognized by Jange: – We, as provincial direction, have been advising the companies that the best way to start is to look after the community. A concrete example of this is Mahera, here in Ancuabe. In one of the areas was LPP, but the association organized itself – a freedom-fighters association – that did a joint-venture with another company. It is not easy, but we try to minimize the situation.

In Manica Province, according to a local television, some associations have already got mining certificates, which offers them some hope and makes them abandon the illegal mining to create big companies. Just not in Cabo Delgado.

The problem extends to the associations’  community, which have lost their fields in favour of Montepuez Ruby Mining’s concession. But MRM says  “This information is inaccurate. Compensation was paid to farmers based on an elaborate land survey and a consultation process that involved all stakeholders, including the communities involved and the state authorities following the laws of Mozambique.” 

In fact, the local association, and community members confirm that there were compensations; each of the farmers got a 9 to 12 thousand Meticais (USD 143-200) payment for their 1 to 4 ha of land. However, “That amount was useless,” and no other replacing farming areas were given to the community people “In 2019, the company said they would grant a substituting area for the farms of Namanhumbiri centre (Sede) but during the 2020 agriculture pre-campaign the company did not want to comment on this issue,” said the local association.

Our investigative report did request from MRM the “elaborate land survey,” but the company did not send it.

Namanhumbir, in Montepuez, has two community associations one called   ‘4th of October’ and the  other ‘Armando Guebuza’, with about 350 members each. According to them, a concession was granted, “demarcated and designated,” to have access to a mining process in a joint-venture project with Gems Rock mining company . Both  associations got 250 ha  each, while Gems had 750ha, . “They  implemented mining  camps in Nacoja and now here in Namahumbir – Namaka  it is still to be implemented.” While each association has 30% shares in the company, Gems Rock detains 40% – and since the last month of January to now the community association is still waiting. , the association mentioned.

They added that, “At ‘first the government said they could give 500 hectares for each association, but now we do have 250 each.. I think the government manipulated.” But Fura says: “In accordance with the share purchase agreement dated February 4, 2020 entered into by a wholly owned subsidiary of the Company and GemRock Company Ltd. (“GemRock”), as amended, (the “Share Purchase Agreement”) Fura paid GemRock US$2.1 million upon completion of the acquisition. Please see the Company’s press release dated February 10, 2020 for more information about the transactions contemplated in the Share Purchase Agreement (the “Acquisition”).

Corporative social responsibility

The occidental multinationals are frequently blamed for the lack of Corporative Social Responsibility . In our previous investigation, as well as in this one, it is difficult to assign culpability to only  one side, when the country’s leaders abuse their own citizens.

“Montepuez Ruby Mining (MRM), is the only one contributing with the production tax.”,   150 houses for the resettlement are still under construction, ,  the company built some school rooms, bore holes, health post, and paid compensation. However there was   no prosecution for those involved on the human right abuses ( deaths, mutilations), all these years “ Gemfields agreed, on a no-admission-of-liability basis the settlement of all claims brought by the English firm Leigh Day on behalf of individuals living in the vicinity of MRM’s mining concession in the North Mozambique … Gemfields is also cognisant of the fact that, had it prevailed at trial (which it full expected to do), not of its own, likely very substantial, legal costs would have been recoverable from the claimants or from Leigh Day.

When we went to the  Mustang (New Energy) concession  , we spoke to people from 3 communities that told us nothing had been built. “They didn’t even talk to us. They came once years ago.” The only existing school room is a rudimentary room built decades ago.

The money company Mustang – New Energy did not reply to our questions

 

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