China offers Zim $3bn for platinum

2011-02-04 15:41

Harare - China has offered Zimbabwe $3bn for vast platinum reserves, a local private newspaper reported on Friday but said the deal was likely to be rejected by the government over its terms.

Zimbabwe, with an estimated $6bn yearly economy, has the world's second largest platinum reserves after South Africa.

It has relied heavily on Chinese investment to prop up a staggering economy largely shunned by the West over President Robert Mugabe's suspected human rights abuses.

Quoting sources in Zimbabwe's unity government, the weekly Zimbabwe Independent said the master-loan-facility from the Export-Import Bank of China would give Harare the money to revive an economy wrecked by what many see as chronic mismanagement by Mugabe's ZANU-PF party.

"Sources said the deal has been received with scepticism in government circles because it has stringent conditions," it said, citing these as "mortgaging platinum reserves, ceding Chiadzwa (state) diamond revenues and tollgate fees."

Finance Minister Tendai Biti reportedly told the Independent talks were going on with the Chinese, but declined to discuss details.

Biti and Mines Minister Obert Mpofu were unavailable for comment. Chinese officials were also not available for comment.

On Monday, Economic Planning and Development Minister Tapiwa Mashakada told Reuters the state-run China Development Bank could fund up to $10bn in Chinese investment in Zimbabwe's mining and agriculture sector.

The announcement could be aimed at trying to prod Western investors to sink more money into Zimbabwe out of fear they will lose ground to China, analysts said.

Western investors, already cautious of doing business with Zimbabwe due to its precarious political position, are also worried about a law that says 51% of firms worth over $500 000 should be owned by black Zimbabweans.

Resource-hungry China, which has strong ties with Mugabe's ZANU-PF party from the 1970s, has been steadily increasing its investments.

Its Foreign Minister Yang Jiechi is due to visit Zimbabwe next week to explore business opportunities in the mineral-rich country.

A unity government formed by Mugabe and rival Prime Minister Morgan Tsvangirai in 2009 has brought stability to an economy crushed by hyperinflation about two years ago.

  • Nasdaq7 - 2011-02-04 16:57

    The reserves are estimated to be worth almost $40bn.

  • Nasdaq7 - 2011-02-04 17:22

    Well they wanted to be friends of China... the Chinese who will own all their natural resources and pay them Chinese equivalent wages.

  • ror - 2011-02-04 17:46

    The Chineese have been offering them money for the last 15 years- so whats changed.What a load of hog wash, the country is stuffed.

  • Ashanzi - 2011-02-04 17:57

    This is precisely the issue the Africans have with the Colonialists - selling Africa's natural resources! Beneficiation of our plstinum resources would not only generate far greater inflows of capital and foreign revenues, but also create thousands of jobs. African politicians should not be allowed, or empowered, to destroy our continent through short-sighted policies.

  • Zimbabwean Slaves - 2011-02-04 19:03

    The people of zimbabwe will become slaves of the new colonlial masters - and trust me, the Chinese work their slaves very hard. All the value will leave the country. Next will be the farms, with all the produce going back to china. But who cares - mugabe would love to have 75% of zimbabweans die - he does not care.

  • Owen - 2011-02-04 22:03

    and how long will it take the thieves to squander the 6bn which should be like 30 to 40 bn. talk about giving away the family silver. The chinese are just a modern day Cecil Rhodes.

  • jaycee - 2011-02-05 09:44

    Zimbabwe is such a tragic case. It is now considering selling off the family jewels at a ridiculously low price, just to prop up a system that will gobble up this money and with nothing to show for it at the end.

  • Gary - 2011-02-06 08:38

    What goes around comes around. Owen, Cecil John Rhodes loved the land, but was a Company yes man. What Rhodes started became the bread basket of Africa with prospects into the future. I am not sticking up for Rhodes, but he was a product of the time period of British Industrialisation and believed the world was a better place with Colonialism and championed England's expansion agenda. Now China has it's own Industrial Revolution and they like England are just practising another form of colonialism by their need for resources but times have changed as the Chinese are using the roads, towns and infrastructure that took more than a 100 years of colonialism to create. They are simply feeding off England's success like locusts. South Africa's platinum producers should be concerned as if China gets these rights then essentially the biggest user of platinum will have it's own supply and the price will drop possibly making our producers less profitable from oversupply of PGM's.

  • drow ninja - 2011-02-06 18:30

    I never understood wwhy do we sell our natural resources as raw materials when we can make the stuff they are used for. That should really be banned in SA. We should buy the resources in African countries like Zim to save them from themselves. Why does the international powers keep a ban on Zim coz not the targeted people suffer but common citizen and they should back off as they can see the sanction & collapse does not affect Robert & his bigwigs not they feel sory by the helpless Ordinary Zimos, who can not even vote him out!!!

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