Russia's Foreign Minister, Mr Sergey Lavrov (left) congratulates President Mugabe (right) on the signed megadeal between their two countries.

HARARE, Oct. 8 (TSR) – The United States has refuted media reports claiming Washington threatened to impose new sanctions on Zimbabwe over the country’s multi-billion dollar trade and investment deals with Russia, barely a month after securing similar “mega deals” with China.

The Zimbabwe government last month has signed a $3billion deal with Russia to establish what would be the Zimbabwe’s largest platinum mine when fully operational in 2014 among several other trade and investment deals barely a month after securing “unlimited” deals with China.

The commissioned project in Darwendale is expected to stimulate growth in various sectors of the economy over the next few years.

The US has recently imposed sanctions against Russia on allegations of providing military backing to Ukrainian separatists and generally destabilising the region.

State media, at the weekend, claimed that Washington was trying to sabotage the platinum deal and threatened to tighten sanctions imposed in 2003 over allegations of rights abuse and electoral fraud.

An unidentified official with the foreign affairs ministry reportedly told the Sunday Mail: “The communication on the subject was, indeed, received at the end of last week.

“There was a thinly veiled threat to the effect that, ‘You will also be putting yourselves under sanctions if you deal with Russia and its companies’.

“The Americans list the Russian companies on sanctions and also say these sanctions will only be lifted if Russia ‘co-operates’ on Ukraine.”

However, the US embassy in Harare told that there was no truth to the allegations.

Embassy spokesperson, Karen Kelley, said there is no link between sanctions Washington imposed on Russia and those the country placed on President Robert Mugabe and his cronies more than a decade ago.

“Regarding the recent reports in the local media in Zimbabwe, I can say that there is no link between U.S. sanctions on Russia and the targeted sanctions policy on a limited number of individuals and entities in Zimbabwe.

“All U.S. sanctions frameworks are separate and distinct,” Kelly responded to in an email Monday.

Kelley also explained her country’s position on Russia.

“Due to Russia’s escalated, direct military intervention and continuing efforts to destabilize Ukraine, the Departments of Treasury and Commerce announced they imposed additional sanctions and deepened existing sanctions on Russia,” she said.

“We have also said if Russia fully implements the 12 requirements of the September 5th Minsk agreement, these latest sanctions can and will be rolled back.”

“If instead Russia and the separatists it supports continue their aggressive actions, the cost will continue to rise.”

Zimbabwe and Russia Mega-deals

The signed agreement, led by Russian Foreign Minister Mr Sergey Lavrov, is the biggest joint venture with a foreign investor in the history of independent Zimbabwe, with nearly a million ounces of platinum expected to be produced annually, while thousands of jobs would be created.

Russia has already secured funding.

The joint venture, Great Dyke Investments, is between the Zimbabwe Mining Development Corporation and a Russian consortium made up of three corporations, including a national bank.

The corporations are VI Holdings, Rostec, a technology partner and Vnesheconombank, the financier.

Investment levels are expected to reach $4,2 billion over the next 10 years as there are plans to set up a refinery to promote value-addition, which is a key pillar of Zim-Asset, the Zimbabwe economic blueprint.

The financing agreement for Darwendale project, was also signed between Afromet and VB Bank and another agreement on staff training between Great Dyke Investments and Russia University of Science and Technology.

The first phase will run from 2014-2017 and will see the exploration and infrastructure establishment as well as construction and commissioning of the first stage of facilities for mining being carried out.

During the second phase (2018-2021) there will be construction and commissioning of two underground mines and the second processing plant with additional mines being constructed in the third stage (2022-2024).

Great Dyke Investments board chairperson Dr Hesphina Rukato, said the launch of the project marked the fruition of a vision started in 2006 but had been stalled because of lack of funding.

“Between 2013 and 2014, new shareholders came on board and previous geological data was restored, reanalysed and confirmed,” she said.

“In line with Zimbabwe’s policy of value-addition and beneficiation, as expounded in the country’s economic blueprint Zim-Asset, it is planned that a refinery will be established so that value is added in country. This project has the potential to contribute significantly to the socio-economic landscape of Zimbabwe.”

She added: “Additional benefits will be realised in service sectors such as technological transfer and skills development, education, health as well as development of infrastructure.”

President Mugabe said the “historical act” would turn around the fortunes of the Zimbabwean economy.

“It will see us rise as a nation and will see our performance, socio-economic, also rise as greater development takes place with greater addition and beneficiation of our natural resources,” he said.

“We couldn’t do it with enemies, No, we can only do with our friends so hand in hand, heart to heart we shall succeed.”

He thanked President Putin and the people of Russia for standing by Zimbabwe against Western onslaught and for their commitment to strengthening the existing bilateral relations.

“It is a message we reciprocate and say yes, yesterday you were our good friends you helped us to become what we are–an independent people,” President Mugabe said.

“And today you have proved once again that your act, historical yesterday, has once again demonstrated that you still are one of our greatest friends in the world and we reciprocate by saying small though we are, our heart is as large as your own.

“Small though we are, our thoughts and beliefs are as good as your own. Small though we are, our dedication and commitment to the revolution, ideas and objectives of the revolution of yesterday that commitment continues. We are sure as a Government of the people, a Government which is custodian of the natural resources that belong to the people that we would want to see exploited in the interest of the people, exploited in partnership with those who are like ourselves.

“Ngati tendei nemoyo wese shamwari dzedu dzakatibatsira zuro pfuti nepfuti tikapihwa dzidzo yevana vedu vakaenda ikoko semaendero avaita kuChina ndivo vatinavo zvakare vatiri kuti nemi tichaenderera mberi. Hushamwari hwazuro, hushamwari hwanhasi.”

Minister Lavrov said Russia and Zimbabwe were “very old friends”.

“This is based on a mutual understanding of interests and on the common understanding on the future of the Russian and Zimbabwean people,” he said.

“I am very gratified on this occasion that the visit of the Russian Foreign Minister took place to Zimbabwe and we had a very rich discussion with the President of Zimbabwe and my colleague minister of Foreign Affairs of Zimbabwe reiterating our resolve to provide all political support for promoting trade and economic investment cooperation between our countries (and) to promote human and cultural cooperation including cooperation in the field of education where not only the Russian government provides scholarship to Zimbabwean citizens but also Russian companies are joining the process and participate in financing the training of Zimbabweans who will be working on this and many other joint ventures.”

The project, launched in the presence of President Mugabe, Cabinet Ministers, diplomats traditional leaders, legislators and Russian senior Government officials and businesspersons, would be implemented in three phases.

Zimbabwe and China Mega-deals

Zimbabwe scored more mega deals in China in August with funding agreements and feasibility studies of power projects, road dualisation and railway line construction being constructed, including a memorandum of understanding for feasibility studies on the digitalisation of the national broadcaster ZBC and Transmedia ahead of the June 2015 International Telecommunications Union deadline after which all broadcasters should have switched to digital. The MoUs for feasibility studies on dualisation of the country’s highways are for Beitbridge-Harare, Harare-Nyamapanda, Harare-Chirundu and Mutare-Harare.

The Xi Jinping government had assured the Zimbabwean delegation – led by President Mugabe – that there would be no limit on how much Beijing can avail to Harare on viable projects from which loan repayments would be recouped from the same.

A consortium of private Zimbabwean and Chinese companies, China Africa Sunlight Energy (CASECO), signed an integrated project worth over US$2 billion that will see the firm constructing a 600-megawatt thermal power station in Gwayi by 2017, produce 2,4 million tonnes of underground coal per year, construct the Gwayi-Shangani Dam as well as construction of Gwayi-Insukamini Power Station transmission line.

The company is a joint venture between Oldstone Investments, a Zimbabwean company and a Chinese firm, Shandong Taishan Sunlight Investments, with its consortium HCIG Energy Company Limited and Cad Fund.

The four firms signed the agreement for the development of the Gwayi Integrated Project.

It is important to note that the Zimbabwe government would not mortgage it’s minerals to get funding from China for its projects.

“Our securitisation, which we have already agreed (on) is not to mortgage our minerals but to set aside a portion of cashflows that arise when we are exploiting our mineral resources whether diamond and gold”, Finance and Economic Development Minister Patrick Chinamasa said.

“As you know, companies which are exploiting our diamonds, gold are liable to taxation royalty, depletion fee and other aspects of taxation and basically the framework which we have agreed is that from those taxes, I can set aside a portion of those cashflows towards servicing any loans that I secure to fund our various projects,” he added.

Zimbabwe also signed a loan of $218 million towards NetOne to expand their coverage of telecommunication that would result in the expansion of the mobile network operator’s network coverage.

Minister Chinamasa said he also requested China Export and Credit Insurance Corporation to give insurance to a loan of $98 million from China Exim Bank to TelOne in order for them to expand fibre optic programmes.

“In this regard, I have committed Treasury to take over a legacy debt of $359 million so that the TelOne balance sheet is cleaned up to make it more attractive to the suitors who might want to advance funding to the company. I have already communicated this message to China Export and Credit Insurance Corporation and also to China Exim Bank that when they deal with TelOne they should do without the $360 million legacy debt,” he said.

Source: News agencies


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