More than four years after Russia declared an interest in developing platinum deposit in Darwendale, the Zimbabwe government said it would put the project afresh on an international tender for foreign investors.
Russia and Zimbabwe have had good and time-tested relations from Soviet days supported Robert Mugabe and his ZANU-PF against the West. Since the collapse of the Soviet era, Russia still maintains close political relations but its economic engagement has staggered.
Russia has attempted to raise its economic profile, the latest considered as an important milestone was in September 2014 when Russia declared the interest in the development of platinum deposit in Darwendale.
In September 2014, Foreign Minister Sergey Lavrov launched the US$3 billion project, the platinum mine located about 50 km northwest of Harare, the Zimbabwean capital. The Russian project, where production is projected to peak at 800 000 ounces year, involves a consortium consisting of the Rostekhnologii State Corporation, Vneshekonombank, as well as investment and industrial group, Vi Holding, in a joint venture with some private Zimbabwe investors as well as the Zimbabwean government.
After the project launch, Brigadier General Mike Nicholas Sango, Zimbabwe’s Ambassador to the Russian Federation, wrote me an email that “Russia’s biggest economic commitment to Zimbabwe to date was its agreement in September 2014 to invest US$3 billion in what is Zimbabwe’s largest platinum mine.”
“What will set this investment apart from those that have been in Zimbabwe for decades is that the project will see the installation of a refinery to add value, thereby creating more employment and secondary industries,” Brigadier General Sango explained.
“We are confident that this is just the start of a renewed Russian-Zimbabwean economic partnership that will blossom in coming years. Our two countries are discussing other mining deals in addition to energy, agriculture, manufacturing, and industrial projects,” Ambassador Sango added.
Later, there was another landmark in the bilateral relationship. The groundwork was laid for expanding trade and investment when Zimbabwean President Robert Mugabe met President Vladimir Putin in Moscow in May 2015.
Unexpectedly, political developments ushered in a new era with the emergence of a new leader in Zimbabwe. Russia reaffirmed its commitment to work with the new leadership.
Early March 2018, during his official visit to Harare, Sergey Lavrov was received by President Emmerson Mnangagwa. Lavrov also had an in-depth meeting with Vice-President Constantino Chiwenga and later held talks with Minister of Foreign Affairs and International Trade Sibusiso Busi Moyo.
They acknowledged the fact that the two countries are interested in the promotion of partnership in geological exploration and production of minerals. They all discussed spheres for possible cooperation and considered the platinum deposit as the driving force in the entire range of trade, economic and investment ties.
“The Republic of Zimbabwe Minister of Foreign Affairs and International Trade, Sibusiso Busi Moyo, and I have reviewed our contacts in the context of relations between Russia and Zimbabwe. We have focused on a project for the integrated development of the Darwendale platinum group metals deposit, one of the largest in the world, where Russia and Zimbabwe operate a joint venture,” Lavrov said.
According to Lavrov, Russia and Zimbabwe maintain very strong mutual sympathies and friendly feelings, and this ensures a very trustful and effective political dialogue, including a top-level dialogue. But now, it is necessary to elevate trade, economic and investment relations to a level that would meet political and trust-based relations.
Understandably, there has always been keen competition among foreign investors for mining projects. In March, the same month when Sergey Lavrov visited Harare, a Cypriot investor signed a US$4.2 billion deal to develop a platinum mine and build a refinery in Zimbabwe, an investment that President Emmerson Mnangagwa said showed the country was open for business.
Signing the agreement with Cyprus-based Karo Resources, Mines Minister Winston Chitando, said work would start in July, with the first output of platinum group metals expected in 2020, aiming to reach 1.4 million ounces annually within three years.
Now early November 2018, President Emmerson Mnangagwa said his government would soon open up the platinum sector to all interested foreign investors. Zimbabwe has the world’s second-largest platinum reserves after South Africa.
He said the government policy would guide the sector on such issues as exploration, ownership, mining, processing, and selling.
Mnangagwa has committed to opening up Zimbabwe’s economy to the rest of the world in order to attract the much-needed foreign direct investment to revive the ailing economy, make maximum use of the opportunities for bolstering and implementing a number of large projects in the country.
He said that Zimbabwe would undergo a “painful” reform process to achieve transformation and modernization of the economy.
AFP reported that international funds are still blocked – Zimbabwe must clear its arrears before it can raise more loans needed to rebuild the country. With a total debt of US$16.9 billion, it says it will clear almost US$2 billion of arrears with the African Development Bank and the World Bank by October 2019.