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Tichaona Zindoga Senior Political Writer
THERE is a report that made some headlines over the weekend. It concerns a Russian consortium that has been established to invest in platinum in Zimbabwe.
The consortium, led by a Sergei Chemezov, is said to be keen to invest US$3 billion.
The reports say the companies, Vi Holding, Rostec and Vneshekonombank, will invest in developing the Darwendale platinum field in Zimbabwe which is said to be the second-largest in the world.
The consortium is said to be planning to complete its assessment of the field’s resources by the end of 2014, with construction of the US$500 million mining and processing complex slated to start next year.
The complex should be completed by 2018 and have an annual output of 18,7 tonnes of platinum.
Of the interesting details of the reports, we are told Russian President Vladmir Putin in response to an April letter written by Chemezov, the head of state technology corporation Rostec in April.
“Putin agreed with Chemezov’s idea of having state-owned Vneshekonombank supply the finances,” The Moscow Times cites Kommersant as reporting.
(Somewhere it was insinuated that Rostec was “Putin’s” – belonged to him.)
US$3 billion is some significant amount of money that Zimbabwe, which has not been very flush with cash, needs at the moment, wherever it comes from.
That brings another significant piece of news that made it recently.
On May 21, Time magazine published world maps of export commodities.
“Ever wonder what exports ultimately bring in the most money around the world? For many countries, it’s obviously oil, but for others, commodities ranging from soyabeans to opium to diamonds bring in the most cash,” it explained.
For many Zimbabweans, the maps might present a few surprises, couched as we are, in the belief that Zimbabwe is an “agro-based economy” – and thankfully tobacco production is peaking; or that we have all the diamonds, a quarter of the world and gold.
According to the maps, whose information is based on the CIA Handbook, Zimbabwe’s most valuable export commodity is actually platinum.
Comparatively, in the region South Africa’s most valuable export was gold, Zambia copper; Botswana, DRC and Namibia diamonds; Mozambique, aluminum; and did we expect this – the most valuable export for Malawi is tobacco.
Here are a few picks from the maps: most countries in South America have transport equipment, soya bean and copper as export commodities; while oil and petroleum are for the Middle East and Gulf States.
Europe and North America have machinery, manufactured goods, transport and motor vehicles.
India is said to have precious stones as its most valuable export products.
Platinum thinking
Platinum is nothing new in Zimbabwe; all that is needed perhaps is a bit of platinum-centred thinking.
In fact, platinum forms the most notable feature of the Great Dyke, the mineral rich escarpment running through the “heart of Zimbabwe” for about 550 kilometres in a roughly north-south direction.
According to the journal Platinum Today the PGM (platinum group metals) occur in a layer known as the Main Sulphide Zone, which is typically about three metres thick.
It tells us that the economic mining width may be as little as one metre, depending on grade, metal prices and the chosen mining method.
The Chamber of Mines (too bad the website was apparently last updated in 2010) says Zimbabwe “has the second largest known deposits of platinum in the world”. It explains that the development of PGM dates back to 1969 when Union Carbide successfully undertook trial mining in Wedza, culminating in refined metals being sold.
“Prices then were not high enough to allow for sustained viability to be achieved. A number of exploration programmes and resource evaluation projects were undertaken since then and nothing of substance materialised until 1994 when Mimosa Mine started producing on a small scale. This was followed by the much-publicised BHP/Delta Gold joint venture for the development of the Hartley Platinum mine.
“Despite the demise of the Hartley Platinum mine in 1999, the thinking in the minerals industry is that the PGM resource on the Great Dyke can be exploited viably with handsome returns, and investment plans continue to appear on corporate agendas.”
It adds that Zimbabwe “considers the PGM resource to be an important aspect of the country’s mineral development in the new millennium.”
One cannot be too sure if the country takes the PGM issue as “importantly” as the rest of the world does with respect to Zimbabwe’s position.
The exploitation of platinum in the country has been anything but earth-shattering with the three biggest mines Zimplats, Mimosa and Unki doing pretty little to claim the status that Zimbabwe has as the second largest producer of platinum and as the most competitive in its production.
Past figures on the mining sector’s contribution to the economy have not been very complementary of PGM.
Diamonds and gold have been tops
Happily, figures from the 2014 Budget indicate that platinum production has been on the rise in the last five years with a rise from 6 848 tonnes in 2009 to a projected 14 000 tonnes this year.
Zimplats is driving the growth with significant investments in the sector.
While in 2014 the mining sector is projected to grow by 11,4 percent, according to the budget statement, “on the back of planned investments and largely driven by strong performance in gold, diamonds, nickel and coal,” platinum does not feature.
Economic – and common – sense should have had platinum leading the upsurge.
It is not.
On the other hand, platinum mining companies are guilty of exporting raw platinum rather than set up refineries here, which would add value to the product.
President Mugabe had to read the riot act to platinum miners, hinting on a ban on raw exports, leading to companies taking serious the issue of a refinery.
South African strikes
It is said that one man’s nightmare is another man’s dream.
Well, Zimbabwe could well have been enjoying the nightmare of incessant platinum strikes in South Africa -the leading producer of the resource.
The crippling strikes, which are increasingly taking a dangerous turn – consider Marikana – and political (witness the barbs between EFF and ANC) are even threatening the economic wellbeing of South Africa.
The restlessness in the platinum belt is discomfiting to investors, local and foreign.
It is a gap that Zimbabwe could fully exploit, if it puts its house in order.
There is another advantage.
The budget statement recognizes another weakness of Zimbabwe’s competitor.
It says, “…platinum mining in South Africa — the top world producer, is becoming relatively more expensive than in Zimbabwe — the second largest platinum producer in the world.
This has placed Zimbabwe at an advantage in terms of investments, which are expected to boost production in 2014 and beyond.”
Given these factors, Zimbabwe could do itself a big favour by thinking platinum.
Online Reporter