IN DEPTH | Russian investments in Zimbabwe: A long-game of roulette, so far

President Mnangagwa greets Vladimir Putin at Russia-Africa Summit (Photo: TASS)

Sitting next to Vladimir Putin at the Russia-Africa Summit in St Petersburg, President Emmerson Mnangagwa pitched for business in areas such as energy, technology, mining and infrastructure.

In Zimbabwe, Russian investment has not exactly been a roaring success so far.

Following Western sanctions on Russia and the Ukraine war, Russian investors abandoned what could have been Zimbabwe’s biggest platinum mine. Elsewhere, plans by Alrosa, the world’s biggest rough diamond producer, have taken longer than the company wanted.

Here, newZWire takes a look at Russian investment plans in Zimbabwe over recent years, and where they are now.

Darwendale: the great platinum hope

Russia’s Vi Holdings had plans to build Zimbabwe’s biggest platinum mine, under Great Dyke Investments (GDI).

The Darwendale site holds up to 181,3 million tonnes of ore and enough resources to sustain mining for 20 years. It would have produced 860,000 ounces of platinum per year, making it far bigger than Zimplats.

The main investor in the project was Afromet JSC, owned by Russian Vitaliy Machitskiy’s Vi Holdings. The company spent US$100 million on pre-development and exploration. In 2019, Landela, a company linked to businessman Kuda Tagwirei, took up a 50% share of the project.

But COVID and Western sanctions on Russia hit, and GDI found itself struggling to raise US$665 million for the first phase of development. GDI tried to sell the project to Implats, which turned down the offer over concerns about the ownership of Landela.  

With Russian companies no longer able to raise capital in London or New York, the die was cast. In June 2022, GDI quit, citing “the global sanctions of Western countries against Russia, which naturally also applies to Russian investments abroad”.

Kuvimba Mining House, now running the project, has scaled back the more ambitious plans of the project.

Development at Darwendale delayed by funding (G. Marawanyika/Bloomberg)


Alrosa: Diamonds taking forever

Alrosa is the world’s biggest rough diamonds producer. It first showed interest in Zimbabwe in 2014, let left after facing government frustrations. The company returned in 2018, with its then-CEO, Sergey Ivanov, flying to Harare to meet with Mnangagwa and local business executives.

A diamond policy announced that year allowed Alrosa to be one of only four companies allowed to mine diamonds in the country. Zimbabwe had banned all private companies from diamonds.

Alrosa then signed an MoU with state-owned Zimbabwe Consolidated Diamond Company (ZCDC) . Alrosa got 70% of new projects, with ZCDC getting 30%. The split was a concession to Alrosa, as, under the diamond policy at the time, the Zimbabwe government was to hold 46% of all diamond mining in the country. 

Alrosa immediately released US$12 million for exploration, pledging US$9 million per year to explore new projects.

ZCDC hoped that the Alrosa investment would help it grow output to 10 million carats by 2023, which would make Zimbabwe one of the world’s top five producers. But red tape in Zimbabwe and Western sanctions on Alrosa and on Russian diamonds have delayed progress. Just last week, the US placed sanctions on Alrosa’s new CEO, Pavel Marinychev.

Alrosa is sticking with Zimbabwe, and a company delegation is expected in Zimbabwe shortly. ZCDC chairman Munashe Shava, at the Russia-Africa summit, said the joint venture hopes to complete exploration this year.

“We have selected and identified some opportunity areas where we are currently doing exploration. After exploration, we will do a review of the results,” Shava said. “We are planning to have this done by the end of the year.”

This would then be followed by a feasibility study and mining operations will then start, he says.

Mnangagwa with then Alrosa CEO Sergey Ivanov at the company’s Moscow offices, January 2019


Uralchem: the deal that never was

In 2018, Russian billionaire Dmitry Mazepin landed his private jet in Harare, hoping to buy Chemplex, the state-owned chemicals and fertiliser company that owns Zimbabwe’s sole phosphate mine.

The government had just put up the “For Sale” sign on Chemplex and other state assets, as part of a now-abandoned privatisation drive.

Mazepin’s Uralchem, the world’s second-largest manufacturer of ammonium nitrate, controls a big share of the global fertiliser market. Mazepin’s Uralkali, the world’s largest miner of potash, used in the manufacture of fertiliser, is worth US$15 billion. Mazepin has links to Russia’s top lenders, such as Sberbank, VTB and Renaissance Capital. VTB and RenCap have previously done business in Zimbabwe.

Mazepin wanted control of Chemplex, but some in the Zimbabwe government turned him down. They had other preferred local bidders waiting.

“Well of course I don’t think we’ll agree to less than 50/50…we will not be simple minority shareholders there,” Mazepin said in Moscow in 2019.  

While Mazepin has been unable to buy Chemplex, Uralchem has gone ahead and set up in Zimbabwe. In 2021, the company opened a branch in Zimbabwe, the United Fertiliser Company, and is importing fertiliser into Zimbabwe and the region.

At the Russia-Africa summit this week, Mnangagwa held talks with Uralchem. Company director Dmitry Konyaev told Mnangagwa that his company would consider building a manufacturing plant in Zimbabwe.

Mnangagwa meeting Uralchem officials in St Petersburg on the sidelines of the Russia-Africa summit


DTZ-Ozgeo and the ‘mafia’

Alrosa plans to develop the Chimanimani claims that were previously held by DTZ-Ozgeo, another Russian joint venture.

DTZ-Ozgeo was a joint venture between the Development Trust of Zimbabwe and Russian firm Econedra. It was one of the diamond miners booted out of diamond mining in 2016 when former President Robert Mugabe nationalised the diamond fields.

In 2018, appearing before a parliamentary committee, DTZ Ozgeo MD Victor Kusyla recounted how, in 2016, former Mines Minister Walter Chidhakwa and his then Permanent Secretary, Francis Gudyanga, sent in an armed police unit to take over the operation “mafia-style”.

“We were invited by Gudyanga and Chidakwa to a meeting of all diamond producers, where an announcement was made that we must cease operations. Within a few minutes when I telephoned one of my managers at the mine, he told us that already about 80 heavily-armed policemen were at the mine forcing everyone to pack their belongings and leave,” Kusyla said.

Russia and Zimbabwe lithium

In 2022, China’s Huayou Cobalt bought Prospect Lithium’s Arcadia Mine for US$422 million. Just over a year before, it could have been the Russians.

Prospect Resources signed a memorandum of understanding in 2019 with Uranium One, the Canada-based unit of Russia’s Rosatom. This would have seen Uranium One taking a stake in Prospect and buying over half of the lithium from the Arcadia mine.

Uranium One was granted an exclusive 90-day period to do due diligence, which was to lead towards talks for shares in Prospect and at least 51% of Prospect’s future lithium production from Arcadia. In the end, Prospect went with a better offer from Huayou.

Uranium One is still looking for other lithium opportunities in Zimbabwe