Russians start $3bn mine in Zimbabwe

The good news for Zimbabwe is that Russian investors have started a new $3 billion (R33bn) platinum mine about 50km north-west of Harare. Russian Foreign Minister Sergey Lavrov and Zimbabwe’s President Robert Mugabe turned the first sod yesterday.

The bad news for Zimbabwe is that a South African mining firm, which believed it had a licence to extract platinum nearby, and invested millions prospecting and producing a feasibility study, and was then kicked off its claim, last week won an order to seize all Zimbabwe’s diamonds sold in Antwerp over the past 10 days.

Lavrov and Mugabe launched the joint venture to develop the Zimbabwean deposit of platinum group metals in the Darwendale district. The mine was targeting production of 250 000 ounces annually within three years, the Zimbabwean ministry of mines said.

Peak production would be 800 000 ounces a year, which should help Zimbabwe produce 1 million ounces annually in five years time.

The land, which includes the site Russian investors secured, used to belong to South African-owned Zimbabwe Platinum (Zimplats), which ceded it to the government of Zimbabwe in 2006 for empowerment credits and cash, but was never paid out. The argument between Mugabe’s government and Zimplats about “indigenisation” of its assets is still simmering.

Zimplats is still owed about $150 million from that enormously rich but geologically complex asset. Part of the land was also portioned out to other potential investors who have not yet decided whether to begin mining or sell off.

The Russian project that went live this week involves a consortium consisting of the Rostekhnologii state corporation, Vneshekonombank, as well as investment and industrial group Vi Holding, in a joint venture with as yet unnamed private Zimbabwe investors as well as the Mugabe government.

Initially it was thought the new platinum mine was ready to go, but some mining engineers in Zimbabwe say some more exploration is still needed, which will cost between $30m and $40m and take 17 months.

Various potential Russian and Chinese speculators and potential investors have been prospecting the former Zimplats land for nearly a decade.

Several licences were issued for this vast chunk of platinum-rich land, some of which have since been bought and sold. The Russian venture is the first one to get to start up.

Full article: Russians start $3bn mine in Zimbabwe (BusinessReport)

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