Zim, Russia ink $3bn platinum deal

DARWENDALE - Zimbabwe and Russia yesterday signed several agreements which will culminate in a $3 billion platinum project in Darwandale, 70km north west of Harare.

Mines minister Walter Chidhakwa told delegates at the official signing ceremony that the total investment was going to be $4,8 billion.

“The level of investment for the project is $3 billion for the mining and the construction of a smelter,” Chidhakwa said.

“There is provision for the establishment of a refinery subject to ongoing discussions. This will bring the total investment level to $4,8 billion.”

The deal is between Pen East Investments, a Zimbabwean company, and Afronet, a consortium of three Russian partners, to form Great Dyke Investments (GDI), which is developing the Darwendale project.

Russia’s Vneshecombank is the lead financier, while Russian State defence conglomerate Rostec is the technical partner.

According to Chidhakwa, the first phase of the project, which will run from this year to 2017, involves a $600 million open pit mine, with a projected output of 265,000 oz per annum and will create 2 000 jobs.

From 2018-2021, GDI will enter its second phase, which will see the extension of the concentrator and setting up of a smelter.

Output is projected to rise to 530 000 oz per annum, with 5 000 jobs created, with investment reaching $1,2 billion.

The deal, nearly a third of the country’s estimated GDP, will see the mine mining about 10 million tonnes of ore to produce 800 000 platinum ounces and creating over 8 000 jobs after the project is completed in 2024.

These production projections surpass Impala Platinum’s Zimplats, which produced 240 000 ounces in its full year to June 2014.

Chidhakwa said the first two years of the project will be open cast mining, going underground in the third year.

Speaking  at the signing ceremony, President Robert Mugabe told the Russian delegation led by Foreign minister Sergey Lavrov, that Zimbabwe was in support of Russia’s defiance to sanctions imposed on it by the United States and allies.

“Whoever imposes sanctions on Russia also imposes them on Zimbabwe,” Mugabe said. “It is interesting to note these sanctions were not approved by the United Nations, thus they are illegal.

“Russia stood by us during our revolution and we will stand with them in their revolution. We cannot allow a few individuals to think they can get away with illegally imposing sanctions on sovereign states.”

The deal is the single largest single foreign investment into a country foreign investors have been shunning for unpredictable policies.

In June this year, a consortium of Russian firms Vi Holdings, Rostec and Vneseconombank announced plans to explore the platinum concession in Darwendale.

Russian minister of Industry and Trade, Denis Manturov, said the Darwendale project is set to be one of the biggest in the world. He said the agreements between the two countries could soon bring immediate results.

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