Desperate Zim mortgages critical assets

Chris Goko/Ndamu Sandu

CHINA last month closed in on investment-starved Zimbabwe, wrenching key business agreements, including coal mining concessions and platinum refining deals, businessdigest has learnt.


As well as equity participation, several Beijing investment fronts — mainly state-linked corporations — are taking positions in greenfield projects such as tolling of platinum group metals (PGMs).


PGM beneficiation is currently dominated by Anglo American Platinum (Amplats) and its Zimbabwean peer, Zimbabwe Platinum Mines Ltd (Zimplats) and another Great Dyke miner Mimosa.


Most of lead producer Zimplats’ matte is refined at Implats’ Rustenburg works in South Africa. The Chinese arrangement would be totally new.


Comprehensive investigations by this paper showed that individual Sino-Zimbabwe contracts had an average lifespan of up to eight years.

While the oriental merchants wrestled a 70% stake in the Chaba coal mining concession, to be jointly developed with Zimbabwe’s power utility Zimbabwe Electricity Supply Authority (Zesa) which bodes well with China’s coal specialty, authoritative government sources this week said they were also interested in platinum beneficiation.


Expanding on stand-in Finance minister Herbert Murerwa’s pronouncements on Wednesday that the Chinese were certainly interested in the platinum sector, the source said: “They may not be coming to dig platinum, but are more concerned with the refining process.”


The Asian economic powerhouse had been driven by vast uses of PGMs in the Far East region and native China.


China, the sixth largest economy in the world and managing annual growth rates of nine percent over the last quarter century, has an overheating economy busting with technical manufacturers.


Despite the fact that no corporeal platinum deal has been signed, the timing of the Chinese’s announced PGM interest coincides with measures — disclosed by Harare — to further open up the platinum sector, with 50:50 ventures lined up between existent partners and any interested investors.


To this end, high-level meetings are scheduled for SA next week to expand on the chosen path.


With the Chinese advances secured by way of barter deals, where Zimbabwe will export commodities, the China National Aero-Technology Corporation (Catic) is set to develop Chaba — formerly given to competing Malaysia’s YTL — to provide coal fodder for Zesa’s steam generating Hwange plants.


Sydney Gata, the Zesa executive chairman, argues that the independent development of coal resources not only guarantees a steady supply of product for electricity generation, but also lower power tariffs in the long-run because per tonne costs (of coal) would have fallen from US$31.


Gata, who bagged US$143 million of the US$293 million hunt when Wu Bangguo’s men touched down in Harare, will plough the money into rural electrification and urban distribution networks rehabilitation.


China, whose Huawei Technologies netted an accumulative US$322 million worth of telecommunications deals, is to immediately invest US$28 million in state-run Tel*One’s expansion, managing director Wellington Makamure said.


Makamure would not say whether the telecomms giant was aiming at taking stakes, but emphasised that the phased investment would take Zimbabwe’s land-based lines to 1,2 million by 2009.


With a national subscriber base of just 350 000 and the country’s tele-density falling way below United Nations expectations, the wireless loop investment would see over 150 base stations being installed between now and 2006.


Unlike Gata, who will repay through commodity exports and part shareholding, Makamure said his Huawei arrangement was self-financing and that the five-year Tel *One growth plan would require US$400 million equally shared in foreign cash and local resources.


Much as he is required to pay a 15% deposit for the first phase expansion, Makamure would not say whether he would raise local money instruments like Gata, who has launched electricity bills.


The Chinese, immediately availing US$350 million, are also angling for investments in agriculture, aviation and railways.

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