Chidhakwa, Defence ministry in bitter tussle

MINES minister Walter Chidhakwa is locked in a bitter tussle with the Ministry of Defence over control of the much-vaunted US$4 billion Russia-Zimbabwean platinum mining project in Darwendale amid allegations that the minister is dragging his feet to fulfilling key conditions of the bilateral deal, such as facilitating the issuing of a special grant for the land.

The project is a joint venture between the military through Pen East Mining Company and Russian investors including VI Holdings, Rostec and Vnesheconombank.Chidhakwa though, 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.

Previous deals involving the army such as a joint diamond mining venture with the Chinese in Marange, have been clouded in secrecy.

Chidhakwa has previously stated that he is on a drive to ensure transparency in the country's mining sector, including the diamond industry, but is reportedly facing massive resistance.

Special mining grants are approved and signed by President Robert Mugabe as provided for by the law, but Chidhakwa has been reportedly sitting on the documents and has not forwarded them to the President for signing. Government sources close to the developments said Russian investors and government had agreed that Mugabe would sign a special grant for the platinum projects in Darwendale.

The sources said Chidhakwa, a close relative of Mugabe, has been stalling the issuance of the special grant, much to the chagrin of the investors and the army.

The Russians are understood to be currently conducting feasibility studies.

"The deal with the Russians is stalling because the minister is refusing to approach the President to issue a special grant to the Russians," said a source within the mines ministry.

"The issuing of the special grant is a pre-requisite to the implementation of the deal which will see the Russians operate in partnership with the ministry of defence – something the minister opposes because he wants to see ZMDC play the leading role."

"As a consequence, the minister has thus far refused to approach the President to issue the special grant that will give the Russians the security and legal standing to operationalise the deal through exploration and mining activities without fear of losing out on their investment," the source added.

Chidhakwa has not been taking calls, repeatedly saying he was busy.

Enquiries via sms to his mobile number had not been responded to at the time of going to press. However, Deputy Mines minister Fred Moyo said there should not be any obstacles hindering the commencement of operations at the mine in Darwendale.

"Everything is on course from our side and there is nothing to stop operations from commencing," Moyo said in a telephone interview last Wednesday.

However, government officials are saying the Russians are threatening to move away because of the bureaucracy at the Mines ministry.

"Everything is just lethargic at the ministry in terms of the processing of relevant documents and the Russians are becoming impatient. They are threatening to leave even though they have already injected US$5 million for exploration activities," said the source.

The deal was among several trade and investment agreements signed by the two countries last September during the visit of senior Russian government officials, who included Foreign Minister Sergei Lavrov.

It is supposed to be implemented in phases that will see the further development of the 6 500-hectare Darwendale Platinum mine to produce 800 000 ounces of platinum. This will increase Zimbabwe's output to over one million ounces and create 8 000 jobs.

The deal has also been affected by financial constraints as the Russian partners feel the pinch of Western sanctions and falling commodity prices especially those of oil and platinum, which the Russian economy is heavily reliant on.