Zimbabwe and Russia strike a deal

Zimbabwe is cultivating economic relations with Russia as its relationship with China starts to face some challenges. Last month Zimbabwe had to find US180 million to service Chinese loans, finance minister Patrick Chinamasa told business leaders in Harare. China has lent Zimbabwe an estimated US$1 billion over the past five years. This briefing was followed with a joint statement by Russian trade minister Denis Manturov and Zimbabwean foreign minister Simbarashe Mumbengegwi announcing a partnership to mine platinum in Zimbabwe’s Darwendale district. Estimates suggest that the mine has the capacity to produce up to 600 000 tonnes of platinum per year, making it the largest platinum mine operation in the country. Thea Fourie, senior economist at HIS, says this agreement will “pave the way for rising Russian investor interest in Zimbabwe’s mining sector in the near term. “According to trade minister Denis Manturov, Russia will increasingly become involved in Zimbabwe’s agriculture, energy, health, infrastructure development and tourism sectors”. It may, however, be a little premature to invest in new logistics lines to support the proposed trade ties between Russia and Zimbabwe. “Investors will continue to face a difficult operating environment, particularly in terms of the provision of electricity, inadequate skills and an uncertain policy environment. This against the background of the controversial Indigenisation Law and the succession of the ageing president,” says Fourie. INSERT $1bn What China has loaned to Zimbabwe in the past five years