Russia’s Vi Holding has quit its involvement in Zimbabwe’s Great Dyke Investments platinum company.
The Russian company has ceded its 50% stake in the company to Zimbabwe’s Kuvimba Mining House, according to an email from Great Dyke, which didn’t give a reason for the change in shareholding. Igor Higer, who had served as Great Dyke chairman and is a represenative of Vi, said his company has exited the arrangement.
Great Dyke owns the Darwendale platinum deposit and has said it planned to build a $3 billion mine to extract the metal, which would make it Zimbabwe’s biggest platinum project.
But last week Bloomberg reported that the project was struggling to get off the ground for the past two years as the Russian holding was scaring off potential financiers for the $3 billion mine.
Initial development work on the Darwendale deposit began in early 2020, but operations at the project were soon halted because of a lack of capital and the site has been abandoned since early last year, according to a report by Zimbabwe’s Centre for Natural Resource Governance.
Vitaliy Machitskiy’s Vi Holding, which held a 50% stake, was reluctant to continue investing after years of delays, the people said, asking not to be identified as the talks aren’t public.
But Kuvimba Mining House, which owns 50% of the project and which the government says it controls, has been unable to attract fresh investment because European platinum buyers don’t want to enter into purchase agreements with an entity with Russian shareholders, the people said. The fear of running up against sanctions stemming from Moscow’s invasion of Ukraine means it’s also harder to borrow money to develop the project, they said.
Darwendale has been tied to Russia since 2006, when former Zimbabwe president, Robert Mugabe, took the concession from a local unit of South Africa’s Impala Platinum and handed it to Russian investors. The first venture to try and tap the deposit was named Ruschrome Mining – it included a state-owned mining company, the Zimbabwe Mining Development Corp., Russian defence conglomerate Rostec, Vnesheconombank and Vi Holding.
The venture later became Great Dyke, named after the geological feature where the deposit is found, and Vi Holding remained the sole investor from Russia.
Darwendale, if built, could potentially produce 860 000 ounces of platinum group metals a year and the deposit could be exploited for four decades, Great Dyke has said. Output was initially expected to begin in 2021, but Russian links and a lack of capital aren’t the only things that have delayed the project.