Platinum project to get US$260m

Chris Muronzi

Funding totalling of US$262 million will be allocated for working capital and equity by African Export-Import Bank (Afreximbank) and the African Finance Corporation (AFC) for the Darwendale platinum project, businessdigest has established.

Information obtained this week shows that a memoranda of understanding with Afreximbank will enable the mining project to benefit from a direct credit line facility to the tune of US$151 million and an additional US$41 million for working capital requirements at the launch of production and sales of commercial products.

In another agreement between Great Dyke Investments, a special purpose vehicle jointly owned by the Russians and the Zimbabwean government, the financial institution will get an equity interest in the Darwendale Project in lieu of financing to the tune of US$75 million.

The equity AFC will take up in the venture was not quantified.

This comes after sources last week told businessdigest that the US$3 billion platinum deal between Zimbabwe and Russia entered in 2013 would not be financed by Russian capital.

The disclosures have brought into question Russia’s contribution to the deal and whether US$3 billion in investment is needed to kick start the project.

The latest information raise questions on why the government did not get funding from Afreximbank and African Finance Corporation if the Russians were not funding the deal.

In her responses sent post production last week, Great Dyke Investments chairperson Hesphina Rukato said she would share more information after June, the expected date of financial closure for the project.

“I am sending you the press statement we shared after H.E. Mr. President’s visit to Moscow in January 2019. It contains information being shared equally between Moscow and Harare.  GDI plans to share more information after the expected date of financial closure for the project, after June 2019,” she said.

“Working financial closure is expected to be in June and then we expect construction is going to start in July.

Rukato accompanied President Emmerson Mnangagwa on a trip to Russia last month that saw the signing of the controversial deal.

In a report back on Mnangagwa’s state visit to Russia, Belarus, Azerbaijan and Kazakhstan last month, Information minister Monica Mutsvangwa confirmed agreements had been signed with Afreximbank and Africa Finance Corporation but did not elaborate on the actual details.

Mines minister Winston Chitando last week confirmed agreements with the two financial institutions had been signed, but said he did not have specifics on the deal.

“I don’t have actual specifics but I know that Great Dyke entered into an agreement with the financiers and they have two separate agreements. You would need specifics from Dr Rukato,” he said.

Asked what the Russians were bringing to the deal, he said did not have actual details of the deals.

“There is no project, especially one of this size, that can be funded only by equity. Such a venture would require a combination of equity and capital. I don’t have the actual numbers, but projects that size normally require debt financing,” said Chitando.

Great Dyke Investments is a joint venture company between the Russians and Zimbabweans in the Darwendale platinum project. Based on the results of a 2017 Bankable Feasibility Study (BFS), the reserves for mining in the first phase of the project were estimated at 7,8 million ounces, or 240 tonnes of PGM and gold.

At least 15 000 jobs are expected to be created when the company starts operating at full capacity.