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Sunday, 10 August 2014 17:00

Chinese loans and Russian investment for Zimbabwe

By Kester Kenn Klomegah

MOSCOW, August 10, 2014 (Buziness Africa) – Early August when U.S. President Barack Obama hosted a summit of African leaders in an effort to strengthen American ties with the continent, Zimbabwe, which desperately needs investment from abroad was not invited. But indeed, Zimbabwe has friends: China and Russia.

 

It was a "historic time" for the country. Zimbabwe, was reported to be in negotiations with the Chinese for a $10 billion loan, requires $27 billion to fund ZimAsset which runs from 2013 to 2018. According to the Chinese Embassy's spokesman, Han Bing, said in an interview that Beijing wanted Harare to use its mineral proceeds to guarantee any future loans.

 

He said in principle, the funding request and use of minerals as collateral has already been accepted and that the China Import and Export Bank and officials from the ministry of finance were working on technical details of the arrangement.

Finance Minister Patrick Chinamasa admitted that China, among other potential donors and investors, remain apprehensive about extending financial aid to debt-ridden Zimbabwe.

 

A Zimbabwe-Russia joint venture company, Ruschrome Mining, plans to invest $1.6 billion in developing a platinum mine and constructing a smelter and refinery in the African state, the state-owned Herald newspaper reported.

 

Zimbabwe holds the world's second-largest known platinum deposits and two of the biggest producers of the metal, Anglo American Platinum and Impala Platinum Holdings, have operations there. The state Zimbabwe Mining Development Corporation and a consortium of Russia's Vi Holding, defense conglomerate Rostec and Vneshekonombank, jointly own Ruschrome.

 

The Herald, which reflects government policy, quoted Mines Minister Walter Chidhakwa as saying the parties would sign an agreement in Harare next month, with mining operations scheduled to start early next year.

 

The first phase of the deal would include developing the mine and constructing a concentrator at a cost of $500 million, while a platinum refinery would be built in the final phase.

 

"The base metals and precious metal refinery is something that we are still in the process of finalizing," Chidhakwa told the newspaper. He was not immediately available for comment on Tuesday.

 

Officials from Rostec, Vneshekonombank and Vi Holdings were also not immediately reachable. Construction of houses, office blocks and roads at the mine in Darwendale, about 70 kilometers west of the capital Harare, was already under way, the Herald reported.

 

Russian daily Kommersant reported in June that Ruschrome was carrying out exploration in the Darwendale block to verify whether it had any platinum reserves.

 

Zimbabwe has three platinum blocks stretching along a 550 kilometer mineral range known as the Great Dyke. Implats, whose local unit Zimplats is the largest platinum producer in Zimbabwe, owns the biggest block, while Amplats has the smallest.

 

Zimbabwean President Robert Mugabe, who won another disputed election a year ago, has struggled to attract external investors, because of his government's policy of forcibly transferring majority shares in foreign-owned companies to locals.

 

Experts say efforts to develop mining sector will generate revenue for the country and create jobs for the population.

 

It is good news for mining in Zimbabwe and Africa as it is a mitigation of the Western isolation Zimbabweans are suffering from and a new boost for mining in the South African region where Zimbabwean untapped minerals like diamonds and platinum sit comfortably on the middle African regional mining industry, Dr. Antipas Massawe, Consulting Mining Engineer based in Dar es Salaam, Tanzania, told Buziness Africa.

 

Zimbabwe and the whole region will benefit from the revenues and jobs new mining investments would create as Russian presence expands into other mining countries in the Region. It is not Zimbabwe alone, most countries in the South African region have benefited from Chinese loans and investments, and Zimbabwe needs them from China more than the rest in the region, as a mitigation of the Western isolation Zimbabweans suffer from, according to Dr. Massawe. (Source: Buziness Africa)

 

 
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