ZIMBABWEAN PRESIDENT ROBERT MUGABE has signed a deal with his Chinese counterpart Hu Jintao in Beijing. The details have not been made public but sources say that China has been given mineral rights to platinum and other minerals. A land deal for tobacco may also be included. Mugabe requires Chinese investors to finance ferrochrome production, irrigation projects, power plants, and transport. The reward is a stake in the nation's platinum reserves.

The big loser in the deal may well be the largely privately owned Impala Platinum Holdings (Implats), which controls most of Zimbabwe's mines. Implats annoyed Mugabe after it put a $750 million expansion program on hold in February. Implats, the world's second-largest platinum producer, was worried about government proposals that would force the company to sell an unspecified stake to black investors and keep foreign currency earnings in Zimbabwe.

Implats main holdings are in Zimbabwe (with an estimated 187 million ounces of platinum worth over $40 billion--three times the resources it has in South Africa). Implats holds 84 percent of Zimbabwe's platinum reserves and has remained largely untouched by Mugabe until now, since the foreign exchange earnings made by the mines have kept the regime alive by buying much needed fuel and machinery and, more recently, food.

A month ago, however, the concerns were that Implats and other companies would be forced to relinquish some of their assets at unattractive prices to black and Chinese investors. Today the situation looks far more grave.

CHINA KNOWS that Mugabe could fall from power any day and cannot assume that mineral rights deals done today will survive regime change. It's likely that what they have agreed to is a substantial portion of currently mined platinum, as well as significant short-run mining rights. The Chinese will also have longer-term rights included, in case Mugabe survives for another several years, but it's unlikely they will be relying on such rights to make the deal worthwhile to them.

What this would mean is that Mugabe plans reneging on current mining rights agreements. After the destruction of the white-owned farms there really was only one place Mugabe could extract revenue--mining.

It is also possible that Mugabe will now no longer need the loan he originally sought from his old comrade South African President Thabo Mbeki. For while the Chinese care not a jot for international conventions and their reputation in the west, and will have no human rights strings attached to their help, Mbeki does care. He was trying, albeit unsuccessfully, to get Mugabe to halt the destruction of opposition area housing and businesses.

This latest deal emphasizes China's determination to strengthen ties with Mugabe, which date back to the 1970s war of independence, when Mugabe's fighters were armed by the Chinese. China's involvement is economically astute, but their willingness to take over the economic means of production in a pariah state is politically worrying.

Roger Bate is a resident Fellow at the American Enterprise Institute.

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