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Mnangagwa's visit to Russia unlocks $300 million

by Staff reporter
27 Jan 2019 at 18:59hrs | Views
President Emerson Mnangagwa's visit to Russia has unlocked $300 million that will trigger implementation of the $2 billion Great Dyke Investment (GDI) platinum mining venture in Darwendale.

GDI officials told The Sunday Mail that the project will be one of the top five platinum mines in the world, adding that, the investment was certain in light of several agreements signed by President Mnangagwa in Russia.

In an interview with The Sunday Mail last week, Mines and Mining Development Minister Winston Chitando said funds for the project will be availed immediately following President Mnangagwa's meeting with President Putin.

"As you aware, our President met the Russian President. As a result of that high level meeting, there was a massive boost for Great Dyke platinum as the investors made an undertaking to release about US$300 million," said the minister.

"What is important to note is that the money was availed immediately and it is ready for immediate drawdown."

Minister Chitando said the funds will enable the company to buy state-of-the-art equipment for effective implementation of the project by June.

"There is going to be a hive of activity on site with positive results soon," he said.

"The first phase of the project will now be in full throttle, starting in June."

Massive infrastructure development is now earmarked to take place in the Darwendale area this year with state-of-the-art equipment set to be established on site.

The US$2 billion project is one of the biggest mining investments in the country since independence and is expected to create 8 000 jobs at its peak.

During his visit to Moscow, President Mnangagwa and Russian counterpart President Vladimir Putin discussed and agreed on implementation strategies for the venture, giving fresh impetus to the project.

In an emailed response to The Sunday Mail, GDI chair Dr Hespina Rukato said a number of agreements were signed in Russia to facilitate implementation of the project.

Among the signed documents include a licence agreement with the Ministry of Mines and Mining Development, Memoranda of Understanding with the African Export-Import Bank (Afreximbank), African Finance Corporation (AFC) and Russian Export Centre (REC).

Said Dr Rukato, "The license agreement stipulates the procedure and conditions for implementation of the decision to issue the Special mining lease dated May 7, 2015 as part of fulfilment of obligations arising from the Agreement between the Government of the Russian Federation and the Government of the Republic of Zimbabwe on cooperation in implementation of the project of comprehensive development of the Darwendale platinum group metals deposit.

"The MOU with Afreximbank envisages provision of a direct credit line facility for the Project (project financing) in the amount of US$151 million and additional US$41 million as part of the credit line facility for formation of working capital required at launch of production and sales of commercial products.

"The MOU with the AFC provides for equity interest of the Corporation in the Darwendale Project in the amount of up to US$ 75 million.

"The Memorandum of Cooperation with AO REC provides for insurance of political risks of participation in the Darwendale project for and AO Afromet (which represents the Russian shareholding in the Russian-Zimbabwean joint venture Great Dyke Investments)."

A statement by the Russian investors availed to The Sunday Mail shows that as a result of the signed deals, the project will be "definitely" achieved.

"We see a great potential for cooperation with the Republic of Zimbabwe in the field of mining, metallurgy and energy," reads part of the statement.

"These agreements express the common interest in developing mutually beneficial business ties between our countries and at the level of commercial structures.

"I am confident that our plans, shaped together with the Zimbabwean partners and friends with regards to the Darwendale Project, will definitely be fulfilled.

"One of the most important points of strategic growth will soon appear in the economic and social structure of Zimbabwe, which will ensure not only a notable GDP growth, but also employment of thousands of Zimbabweans."

The project implementation strategy envisages a phased construction of the mine, processing and metallurgical complex which includes mining of up to 10.5 million tonnes of ore and production of 870,000 ounces (27 tonnes) of platinum group metals (PGM) per year.

The project is one of the most cost-effective in the industry in terms of capital and operational costs, due to the flat and shallow ore body.

Darwendale is characterised by a balanced basket of metals, including platinum, palladium, gold, and other metals."

GDI is a joint venture company between Zimbabwean and Russian shareholders and was officially commissioned in 2014 with Russia's foreign minister Sergey Lavrov as guest of honour.

Since it's commissioning, the project has undergone large-scale geological exploration, complex ore studies and results of a 2017 Bankable Feasibility Study show that reserves for mining in the first phase are estimated at 7,8 million ounces, or 240 tonnes of PGM and gold.

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Source - zimpapers

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