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(Bloomberg) — Zimbabwe’s largest platinum project, which has struggled to take off for two years, has a new challenge. A major stake held by a Russian tycoon is scaring off potential financiers of the $3 billion mine, other people familiar with him said the matter.
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Initial progression paintings at the Darwendale depot began in early 2020, but allocation operations were temporarily halted due to a lack of capital and the site has been deserted since early last year, according to a report by Zimbabwe’s Centre for Natural Resource Governance. Vitaliy Machitskiy, who owns a 50 percent stake, is reluctant to continue investing after years of delay, said other people, who asked not to be known because the talks are not public.
But Kuvimba Mining House Ltd. , which owns 50 percent of the allocation and which the government says it controls, has not been able to attract new investment because European buyers of platinum do not need to participate in acquisition deals with an entity for Russian shareholders, others said. Concerns about facing sanctions stemming from Moscow’s invasion of Ukraine means it’s also harder to borrow cash to expand the allocation, they said.
Darwendale’s assignment is “ongoing” and the mine plan is being reviewed, said Simba Chinyemba, Kuvimba’s lead executive, declining to provide further details. Kuvimba and VI Holding own a share of Great Investments Ltd. , which owns the Darwendale deposit. I can say that the task is moving forward,” he said.
Deep ties with Russia
Darwendale has been connected to Russia since 2006, when former Zimbabwean President Robert Mugabe took over the concession of a local unit of Impala Platinum Holdings Ltd. of South Africa and sold it to Russian investors. The first company to attempt to exploit the deposit is called Ruschrome Mining: it included a state-owned mining company, Zimbabwe Mining Development Corp. , Russian defense conglomerate Rostec, Vnesheconombank and Vi Holding.
The company later Great, named for the geological feature where the deposit is located, and Vi Holding remained the only Russian investor.
Machitskiy, born in Irkutsk, Siberia, is friends during the formative years with Sergey Chemezov, ROSTEC’s chief executive, according to Forbes. once worked in Germany. Chemezov is sanctioned through the US. USA, EU and UK.
Calls to Winston Chitando, Zimbabwe’s mining minister, went unanswered. He said Onesimo Moyo, the country’s mining secretary, was at an assembly when he phoned.
Igor Higer, chairman of Great and a representative of Russian investors, did not respond to questions via email, phone calls or text messages. Vi Holding did not immediately respond to a request for comment.
complicated property
Darwendale, if built, could potentially produce 860,000 ounces of organic platinum metals depending on the year and the deposit could be exploited over four decades, Great said. Originally, production was scheduled to begin in 2021, but ties to Russia and lack of capital were the only points delaying the project.
But its assets, adding the stake in Great, are the same as it had until at least the end of 2020 through Sotic International Ltd. , a company linked to Kudakwashe Tagwirei, an adviser to Zimbabwean President Emmerson Mnangagwa, who is sanctioned by the US. US and UK governments on allegations of corruption.
The government has not said how it acquired the assets or revealed the identity of the private shareholders who own Kuvimba’s non-state 35%. Impala rejected a strategy from Great because he became involved in his property, other people familiar with the scenario. said in February.
This opacity of his has also confused the dating among the shareholders of Great.
The allocation was also blocked for “mismanagement and mistrust,” the Center for Natural Resource Governance said in its report. “Since then, mining operations ceased because the Russian investor stopped injecting cash into the allocation,” he said.
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