$4 billion Zimbabwe - Russia 'mega deal' in limbo

The much-touted US$4billion platinum deal signed by Zimbabwe and Russia in September last year amid a blaze of publicity, which the authorities said would significantly boost production and create thousands of jobs, is hamstrung by financial constraints particularly as the Russian partners feel the pinch of Western sanctions and failing commodities prices, sources close to the deal have said.

This comes as a severe blow to Zimbabwe which is in dire need of FDI. To rescue its ailing economy which has been in crisis for well over a decade.

Similar mega deals in mining, construction, and infrastructure development reportedly worth billions of dollars signed with China are yet to see the light of day amid reports Chinese experts must first come into the country and conduct feasibility studies.

The platinum deal involves a consortium of Zimbabwean investors operating under the name Pen East and Russian investors that include VI Holdings, Rostec, Vnesheconombank.

There seems to be little progress at the mine with sources saying "nothing beyond exploratory work is happening".

However, indications are that progress is being hampered by various factors, chief among them being sanctions that have been slapped by the EU and the US on Russia over its involvement in Ukraine and secondly platinum prices have been falling in the past few months.