Zimbabwe, Russia sign $3 bn platinum mining deal

Darwendale (Zimbabwe) (AFP) - Russia and Zimbabwe signed Tuesday a $3 billion deal to jointly mine platinum in the southern African country, the world's third largest producer, with Moscow providing the investment funds.

The project will see production of nearly 600,000 ounces a year, making it the largest platinum mine in Zimbabwe.

Veteran President Robert Mugabe said the deal, expected to create 8,000 jobs, "will see us rise as a nation".

"It will see our performance, socio-economic, also rise as greater development takes place," he said.

"We couldn't do it with enemies. No. We can only do it with our friends," said Mugabe, whose government has largely been shunned by most Western nations.

Foreign Minister Sergei Lavrov and Industry Minister Denis Manturov signed the deal on behalf of Russia.

Foreign Minister Simbarashe Mumbengegwi and Mines Minister Walter Chidhakwa signed the agreement for Zimbabwe creating Great Dyke Investments (Pvt) Ltd.

The $3 billion will fund the development of the Darwendale Platinum mine northwest of the capital Harare and the construction of a smelter, according to the company's chief executive Hesphina Rukato.

"There is a provision for the establishment of a refinery subject to ongoing discussion. This will bring the total investment level to $4 billion."

Exploration is set to begin this year.

Chidhakwa said the country's platinum output should rise to 1 million ounces per year by 2019.

Three miners already operating in the country -- Zimplats, Mimosa and Unki -- have a combined output of 430,000 ounces a year.

Representatives of Russian banks, including Vnesheconombank signed the agreements to finance the project.

Manturov said the mining project would boost Zimbabwe's position among the world's platinum producers.

"Zimbabwe will further strengthen its position on the global precious metals market," he said.

The signing of co-operation agreements with Russia came weeks after Mugabe returned from a state visit to China where he signed various agreements whose details were not made public.