A plan to build Zimbabwe’s biggest platinum mine at a cost of about $4 billion is floundering because a military stake in the project has deterred potential backers, according to people familiar with the funding discussions.
The African Export-Import Bank has the mandate to raise money for the mine, a joint venture between Russian and Zimbabwean investors. While the bank provided $192 million of its own funds, meetings in the past year with investors including South Africa’s Public Investment Corp., the continent’s biggest fund manager, failed to bring additional commitments, one of the people said, asking not to be identified because the talks are private.
Zimbabwe has the world’s third-largest reserves of platinum, palladium and related metals such as rhodium — which typically occur together — after South Africa and Russia. President Emmerson Mnangagwa is trying to lure investment to the country to help rebuild the economy, devastated during the 37-year rule of Robert Mugabe.
The sticking point is a Zimbabwe military company that once was subject to U.S. sanctions. Zimbabwe Defence Industries Ltd. and Zimbabwe Mining Development Corp. together hold 30% of the joint venture, known as Great Dyke Investments, through Pen East (Pty) Ltd., a company they control, according to documents seen by Bloomberg.
Vi Holding, led by Russian entrepreneur Vitaliy Machitski, has a 50% stake in Great Dyke, and 20% is held by undisclosed Zimbabwean investors, the documents show.
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