Investment

Military stake impedes $4 billion Zimbabwe platinum project

Bloomberg/Waldo Swiegers

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Zimbabwe has the world’s third-largest reserves of platinum, palladium and related metals such as rhodium which typically occur together, after South Africa and Russia.

Wednesday 15, May 2019

(Bloomberg) --A plan to build Zimbabwe’s biggest platinum mine at a cost of about $4 billion is floundering because a military stake in the project has deterred potential backers.

The African Export-Import Bank has the mandate to raise money for the mine, a joint venture between Russian and Zimbabwean investors.

While the bank provided $192 million of its own funds, meetings in the past year with investors including South Africa’s Public Investment Corporation, the continent’s biggest fund manager, failed to bring additional commitments.

President Emmerson Mnangagwa is trying to lure investment to the country to help rebuild the economy, devastated during the 37-year rule of Robert Mugabe.

The sticking point is a Zimbabwe military company that once was subject to US sanctions. Zimbabwe Defence Industries and Zimbabwe Mining Development Corporation together hold 30 per cent of the joint venture, known as Great Dyke Investments, through Pen East, a company they control.

Vi Holding, led by Russian entrepreneur Vitaliy Machitski, has a 50 per cent stake in Great Dyke, and 20 per cent is held by undisclosed Zimbabwean investors and while the documents are dated 2012.

The $4 billion figure is a government estimate of the cost to develop the mine and associated infrastructure.

This would not be the first-time military involvement thwarted a mining project. In 2000, Oryx Diamonds scrapped plans to trade in London after its adviser withdrew support under pressure from the UK government.

Oryx had planned a diamond mine in Democratic Republic of Congo with investors that included another Zimbabwe military company at a time when Mugabe’s forces were fighting in Congo.

 

TAGS : African Export-Import Bank, President Emmerson Mnangagwa, Public Investment Corporation, President Emmerson Mnangagwa, Great Dyke Investments, Zimbabwe Defence Industries, Zimbabwe Mining Development Corporation, Oryx Diamonds, Democratic Republic of Congo

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