Russian Investment In Zimbabwe To Surpass $4bn

Russian Investment In Zimbabwe To Surpass $4bn
Zimbabwe and Russia have signed cooperation agreement worth billions

AFRICANGLOBE – Russian investors financing a $4 billion platinum mine in the Great Dyke told President Mugabe that they will also carry out exploration for other minerals, with the possibility of raising their investment.

The investors, who will channel funds through a new company, Great Dyke Investments, a joint venture with the Zimbabwe Government, said they are on course to meet timelines set out in a “roadmap” agreed in September last year during a high-profile visit by Russian Foreign Minister Sergei Lavrov.

Under that roadmap, the mine in Darwendale will be developed in three phases, with the first phase running from 2014 to 2017 entailing exploration, infrastructure development and commissioning of mining facilities.

The second phase, from 2018 to 2021, will see the establishment of a new mine and expansion of concentration capacity to produce 530,000 ounces of platinum per year.

The third and full development phase will run from 2022 to 2024 and will see the expansion of platinum production to 800,000 ounces per year.

The cost of the project for mining and establishment of a smelter is $3 billion, but this will rise to $4 billion after the establishment of a refinery between 2022 and 2024.

The project will create over 8,000 jobs when complete.

Igor Higer, the general manager of Great Dyke Investments, speaking shortly after meeting President Mugabe here yesterday, said “everything is going well”.

In their meeting with President Mugabe, he said, they had “discussed about development of the platinum project, and also shared general ideas of the world political situation regarding friendly relations between the Republic of Zimbabwe and the Russian Federation.”

He said a meeting between President Mugabe and his Russian counterpart President Vladimir Putin on Sunday had added fresh impetus to the project forcing them into a revision of their timelines.

They now hope to complete exploration work in the first quarter of 2016, he said.

“As you know, President Putin met together with President Mugabe in the Kremlin, and it was agreed that both sides will improve and will increase the economic cooperation between the two governments and both presidents gave a direct order to both governments to work harder in order to improve the economic situation,” Higer said.

“What we promise right now to President Mugabe is that in the beginning of next year, we’ll finish all the exploration in the Great Dyke and we’ll present to his Excellency full geological information about our licence and then, together with our Zimbabwean partners, we’ll see what’s the best way of developing.

‘We’ll move to technical details in order to agree on a detailed action plan.”

The platinum project is the single largest investment in Zimbabwe since independence. When complete, output will surpass the combined production capacity of the three major platinum mines – Mimosa, Zimplats and Unki.

Said Higer: “We’re talking about one of the biggest worldwide platinum projects in partnership between Russia and Zimbabwe. Up to now, the project is progressing very well, we’re getting the full support of our Zimbabwean colleagues.

“We can dream. Everything is going well based on the roadmap which was agreed between our two governments.”

Crucially for investment-starved Zimbabwe, he said they would also be exploring for other minerals which could scale up the total investment.

“As you know, when we’re talking about the Great Dyke, it’s not platinum only,” Higher said. “It’s a lot of minerals including gold, palladium, chrome et cetera. Zimbabwe has all the minerals, most of them anyway, so we’ll be expanding the exploration programme.”

President Mugabe, invited by President Putin in his capacity as African Union chairman for last Saturday’s commemorations of the 70th anniversary of the Soviet Union’s conquest of Nazi Germany in World War II, extended his visit to accommodate the private talks at the Kremlin as well as meetings with Russian investors.

President Putin said his country stood ready to deepen economic cooperation with Zimbabwe, as he invited President Mugabe to name a special envoy who would be granted unprecedented access to Russian ministers and investors to fast-track investment deals.

President Putin also said Russia would continue to support Zimbabwe at the United Nations to thwart Western aggression. Referring to Russia’s use of its veto power in 2008 to block attempts by Britain and the United States to impose punitive sanctions on Zimbabwe, President Putin said “in future, as in the past, we have it in our power to support Zimbabwe, particularly in the Security Council.”