Zimbabwe: Mugabe Meets Putin Over U.S.$4 Billion Deal

May 10, 2015

By Herbert Moyo* [caption id="attachment_18037" align="alignleft" width="300"] President Mugabe and Russia's President Vladmir Putin exchange greetings in Moscow yesterday. - Photograph:Zim Daily[/caption] PRESIDENT Robert Mugabe was yesterday set to leave for Russia for that country's Second World War commemorations during which he will meet with President Vladimir Putin and investors to discuss implementation of the US$4 billion platinum mining deal signed last year. Besides Putin, Mugabe will meet with the Russian investors VI Holdings, Rostec and Vnesheconombank over the US$4 billion platinum joint venture with government in Darwendale. During the Russian trip, which is his twelfth since January, Mugabe will also meet with businesspeople to discuss investment opportunities in the country. Putin invited Mugabe in his capacity as both Sadc and African Union chair to the victory parade, which will be held tomorrow to commemorate the then Joseph Stalin-ruled Soviet Union's victory over Nazi Germany in the war that lasted from 1940 to 1945. Contacted for comment, Presidential spokesperson George Charamba said: "The President has been invited in his capacity as the chair of the AU. Yes he will meet Putin and the Russian business establishment. The platinum issue is uppermost in his mind and they will discuss the issue." The visit comes at a time both countries are subject to restrictive measures or sanctions from Western countries -- Zimbabwe for human rights violations which accompanied the land reform exercise and elections since 2000, and Russia over its policy of aggression in neighbouring Ukraine. As a consequence, government officials said Putin and Mugabe will use the opportunity to discuss the further strengthening of diplomatic relations as well as business issues, including the Darwendale platinum project -- signed in September last year -- expected to be rolled next year. "The two leaders will use the opportunity not only to cement ties but also discuss the Darwendale platinum project. The Russians are worried at the slow pace of progress and they have been saying Mugabe must sign a special lease permit urgently as their investment funds which are in roubles (the Russian currency) will depreciate with the prolonged delays," said one government official of Mugabe's visit. The exchange rate is currently at US$1: 50,29 roubles. Last December it had, according to the EU Observer website, plunged to 64,4 roubles to the US dollar, an overall decline of almost 50% as a result of the fall in world oil prices and EU sanctions. The project is a joint venture between the Zimbabwean military through Pen East Mining Company and Russian investors including VI Holdings, Rostec and Vnesheconombank. The special mining lease will grant the Russians exemption from paying corporate taxes and royalties for a five-year period in which they will re-coup their investment. Government sources said Mines minister Walter Chidhakwa has reportedly been sitting on the documents and not forwarded them to Mugabe because he allegedly prefers that the Russians partner the Zimbabwe Mining Development Corporation (ZMDC) to ensure accountability.

He also wants benefits of the project to accrue to Zimbabweans rather than the army which among other security agents is accused of shady diamond mining deals at Marange. Government officials said the Russians are now demanding more land from the Zimbabwean government in addition to the 6 500-hectares which is the project site. "They are pressing for at least 10,5 hectares more land saying they want to build infrastructure in the form of clinic, 500 houses and a business centre. They argue that the land they have been allocated contains platinum ore and they cannot be building on the site of mining operations, hence the need for more land," said the source. However, an official in the ministry of Mines ministry said there were no delays but the explorative stages are taking longer than anticipated because of the vast area being drilled. He said mining was expected to commence next year after the explorative stages, which should be complete end of this year. "Drilling started immediately after the agreement was signed and the scope of drilling exceeds 300 000 running metres. As the drilling begins, you are able to see a pattern that will inform the development plan, which will tell us how much platinum and other minerals we are dealing with," he said. "The drilling will also determine the kind of operation that will be undertaken, be it pit or shaft mining. The mining development plan also takes into consideration environmental issues." The Mines official added: "After the drilling, we expect the geological report on a discovery that will help develop the feasibility study. "The reports are submitted to the mining affairs committee." Foreign Affairs permanent secretary Joey Bimha did not respond to calls and messages sent to his mobile phone seeking comment on the details of Mugabe's visit. Mugabe is expected back home on Monday. *Source Allafrica/Zimbabawe Daily]]>