From Russia, with love and rage: ED signs two major mining deals in Moscow, but protests weigh heavy

Zimbabwe Russia platinum
Mnangagwa and Putin oversaw signing of a US$192m deal for platinum mine in January, but concern over military involvement holds back progress

President Emmerson Mnangagwa has signed two major mining deals during his tour of Russia, but they have been overshadowed by the political crisis back at home.

On Wednesday, Great Dyke Investments, a Zimbabwe-Russia joint venture, signed an agreement with African Export-Import Bank to provide $192 million to fund the start of platinum mining operations at Darwendale.

Alrosa, the world’s biggest diamond company, announced on Monday that it would start operations in Zimbabwe.

Great Dyke also signed a separate memorandum with the African Financial Corporation on shareholding participation in the project in the amount up to $75 million. Another agreement was signed separately to secure political risks for Russia’s VTB Group participation in the project.

The signing was signed in presence of Russian President Vladimir Putin and Mnangagwa.

However, none of these deals could take the spotlight off the protests at home and government’s handling of dissent. Speaking to Russian news agency Sputnik, Mnangagwa claimed the protests were easing.

“I understand this that there were some protests happening yesterday but they are almost fizzling out and there is no country which has no challenging problems. These come and pass,” Mnangagwa said.

However, critics say his push for investment has been severely damaged by the protests and the heavy crackdown by security forces. Government says at least three people died in the protests, including a police officer. Over 200 have been arrested. 

Images of the military patrolling the streets and an internet blackout will severely undermine Mnangagwa’s “Open for Business” message ahead of what now looks like an ill-fated trip to Davos for the World Economic Forum. There are calls by critics and supporters alike on Mnangagwa to abandon the Davos leg of his tour and return home.

Mnangagwa is desperate for financial aid to resolve a deepening foreign currency crisis in Zimbabwe. In Russia, meetings with Putin ended with no discussion on a financial package, reports said.

 “I can’t say that we want this much or that much,” he said in an interview with the state-run Russian news agency RIA Novosti ahead of the meeting with Putin.

Returning to a standard ZANU-PF refrain, Mnangagwa blamed sanctions for the collapse of the currency over the past two decades.

“I am sure you are aware that as a result of the sanctions imposed on us, those sanctions were able to collapse our own currency,” Mnangagwa was quoted as saying.

The Russians are coming

Mnangagwa has had to work overtime to get the Russians back onside, as their investors have not had it easy in Zimbabwe over recent years.

Alrosa itself abandoned its prospecting licences in 2016 after being frustrated by government. DTZ-OZGEO, a Russian company, is one of several miners that were pushed out of claims in the east of the country.

Appearing before a parliamentary committee last year, DTZ-OZGEO MD Victor Kusyla, described how then Mines Minister Walter Chidhakwa and his permanent secretary Francis Gudyanga had taken over their mine “mafia style”. A meeting with former President Mugabe had failed to restore his company’s claims, Kusyla said.

Another Russian firm, Liberation Mining, has had trouble getting its Lubimbi coal project in Matabeleland North off the ground due to high costs and red tape. The company’s MD, Victor Tskhovrebov, has publicly expressed his frustration over bureaucracy and the currency crisis.

Liberation Mining is controlled by Russian businessman Alexander Isaev, co-owner of VostokCoal.

In Moscow, Mnangagwa played up old friendships with Russia, calling Putin a “senior brother” as he sought to win the Russian leader’s economic support.

“Your Excellency, I would wish that we now attend to deepening economic cooperation between our countries, and our country is developing – it is a third-world country – so that you, as a senior brother, can hold my hand as I try to develop Zimbabwe,” he said.

Mnangagwa also said Zimbabwe has no intention of buying Russian arms for now as it cannot afford them. For now, the country is only seeking assistance in training.

“We have always had cooperation in the field of defence and security with Russia. This we are not abandoning … Yes, at the moment we don’t have much economic muscle to buy the things which we would want to buy from the Russian Federation, but down the line, as Zimbabwe becomes stronger in terms of its economic muscle, we should be able to buy the type of hardware, which we know the Russian Federation has and is the state-of-the-art type of equipment that they have, but we are not in a hurry”, Mnangagwa said.

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