Zimbabwe’s largest platinum mining project, which has been struggling to start production for two years, faces a new challenge. Well-informed people report that a large stake owned by a Russian businessman in the $ 3 billion mining project is causing concern among potential financiers.
Initial development work on the Darwendale mine began in early 2020, but was quickly halted due to lack of capital, until the site had been completely abandoned since early last year, according to a report by the Zimbabwe Center for Natural Resources Management. The people familiar with the matter, who asked not to be identified because the talks were not public, indicated that Vi Holding, which is owned by Russian businessman Vitaly Matchetsky, has a 50 percent stake in owned the project, after years was reluctant to continue investing. of delays ..
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However, Kuvimba Mining House, which owns the remaining 50% of the project and which the government says it controls, could not attract new investment because European platinum buyers do not want to enter into purchase agreements with an entity with shareholders. Russia, according to the informants, who also said that fears of facing sanctions stemming from Russia’s invasion of Ukraine, also means that it is difficult to borrow money to develop the project.
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Simba Shinimba, CEO of Covimba, said in comments on the matter that the Darwendale project was “underway” and the mining plan was being revised, but declined to provide further details. Covimba and VHolding are co-owners of Great Dyke Investments, which owns the Darwendale mine. “What I can tell you is that the project is already moving forward,” Shinimba added.
Deep ties with Russia
The Darwendel mine has been associated with Russia since 2006, when former Zimbabwean President Robert Mugabe took over the concession from a local unit of South African Impala Platinum Holdings and handed it over to Russian investors. The name of the first joint venture to try to take advantage of the mine, Ruschrome Mining – included the state-owned mining company Zimbabwe Mining Development, Russia’s defense group Rostec, and Venchikonombank (Vnesheconombank), and V Holdings.
The company later adopted the name “Great Dyke”, named after the geological feature in which the mine is located, and V Holdings remained the sole investor of Russia.
Born in Irkutsk, Siberia, Macitsky is a childhood friend of Sergey Chemezov, CEO of Rostec, according to Forbes. Macytsky was a board member of several Rostec units, while Chemezov himself was a close ally of President Vladimir Putin, with whom he once worked in Germany. Sanctions have been imposed by the United States, the European Union and the United Kingdom against Chemezov.
There was no response to calls to Winston Chitandu, Zimbabwe’s Minister of Mines. Anisimo Moyo, Minister of Foreign Affairs for Mines, was reportedly in a meeting when his phone was called. Also, Igor Heeger, Great Dyke’s chairman and representative of Russian investors, did not respond to questions via email, phone calls or text messages, and VHolding did not immediately respond to a request for comment.
Great Dyke said the Darwendale mine, if completed, could produce 860,000 ounces of platinum group metals annually, and the mine could be mined for four decades. Production was initially expected to start in 2021, but the project was delayed due to its commitment to Russia, and in view of the lack of capital, although these two factors were not the only reasons behind the delay.
The Zimbabwean government says it controls Covimba; However, its assets, including the stake in Great Dyke, are the same as those owned by Sotic International until at least late 2020, a company linked to Kodakwashi Tagwere, an adviser to Zimbabwe’s President Emmerson Mnangagwa, to whom He is subject. sanctions by US and British governments over allegations of corruption.
The government did not say how it acquired the assets, nor did it disclose the identities of the private shareholders who own the 35% stake in Covimba, which is not owned by the state. People familiar with the situation said in February that Impala had rejected an offer from Great Dyke because it was concerned about its ownership.
Ownership ambiguity has also hampered relationships between Great Dyke shareholders.
The Center for Natural Resource Management said in a report that the project was also hampered by “mismanagement and a lack of confidence.” He added that “mining operations have since ceased since the Russian investor stopped pumping money into the project.”