Maravi

Russians seek to enter Zambian mining sector

Russians seek to enter Zambian mining sector
By Chibaula Silwamba
Friday December 28, 2007 [03:00]

RUSSIAN Ambassador to Zambia Dr Anvar Azimov has disclosed that three Russian companies want to invest a minimum of US$3 billion (about K12 trillion) in the Zambian mining sector. And Ambassador Azimov urged the Zambian government to take advantage of “this golden chance of huge investment”. US$3 billion is equivalent to Zambia’s annual national budget, which was about K12 trillion this year.

A fortnight ago, commerce, trade and industry minister Felix Mutati said Zambia anticipated investment to increase from US $1.4 billion to over US$3 billion by the end of 2008.

Announcing the intention of the Russian companies to invest in Zambia, Ambassador Azimov said the three companies would invest a minimum of US$1 billion (about K4 trillion) each with possibilities of increasing the investments.

“This year, 30 potential Russian investors visited Zambia and there is one good concrete result; three Russian multi-billion investment companies namely RusInvest partner (Renova Groupe), ECN Groupe and Aurora Capital expressed their desire to invest in the mining sector of Zambia, all together US$3 billion,” said Ambassador Azimov in an interview on Wednesday at the embassy in Lusaka. “Of course the priority is mining prospecting. The heads of these three investment companies met Zambian government officials, private business community and their geologists went to Copperbelt Province to study the situation of copper there. But their intention is first to buy the licence for prospecting and secondly set up their activities. They want to make geological survey then to start the process of building plants, electricity power stations, railway line, and houses for the workers and smelters.”

He said the companies’ intentions were to build the mines from geological survey up to processing copper.
“I don’t think that any other company of the world would propose such big investment in Zambia,” Ambassador Azimov. “We understand that now there are no vacant licences for mines though now there is a process of reconsideration. The appeal to the Zambian government for assistance is that they shouldn’t miss this golden chance that if there are possibilities for these three investing groups they will bring huge investments, as I mentioned, over US$3 billion.
“But the problem is that the Ministry of Mines told us that everything is taken, there are no free concessions with exception of Luapula Province.”
He said if there were no other opportunities on the Copperbelt and other provinces other than Luapula Province, then the Russian companies would do geological surveys in Luapula and start their mining activities by constructing plants and smelters.

“But we need the help of the Zambian government because this is huge amount of money,” Ambassador Azimov appealed.
He said the three companies were interested in having joint ventures with local partners though on condition that they retain 70 to 80 per cent shares.
“They will bring Russian capital but they are ready to cooperate with Zambian businesses,” he said.
Ambassador Azimov said the heads of the three companies were happy with the discussion they had with the Zambia Consolidated Copper Mines Investments Holdings (ZCCM IH) and private sector representatives.

“For example, there was a proposal to construct a smelter in Lumwana for US$400 million but these are big companies and they are not interested in investing US$300 million or US$400 million. Their intention is more serious,” Ambassador Azimov said. “By the way, this Renova Groupe invested US$2 billion in South Africa in the diamond sector and the same group is ready to invest US$1 billion but they are even ready to invest US$2 billion in the Zambian mining sector.”
He said the three companies want to construct new modern mines with all infrastructure, including an electricity station, houses for workers, a railway line and roads.
“They are interested in huge projects, not small ones,” he said. “It will be a great break through in economic development of Zambia and our relations. They will be employing many people.”

He revealed that the time the delegation came some mining companies wanted to sell their mines to the Russian companies.
“They met some owners of mines who where ready to sell their mines for amounts from US$300 million to US$700 million but the approach of our companies is to have modern structures – to construct from zero to everything,” he said.
“Each of these companies, if they got the opportunity to invest in the mining sector, they are ready to spend US$10 million for charity goals from every US$1 billion. For example, if these three companies will have the opportunity to invest US$1 billion each in Zambia, it means that US$30 million will go for charity – children, health sector, sport activities, etc.”

He said he had an agreement with the three companies that when they invest in Zambia they should sponsor football.

“It is the practice of Russian businesses if they invest money in any particular country a certain amount of money goes to charity,” Ambassador Azimov said.

He urged the Zambian government to cancel some licences of companies that had not started geological surveys to give chance to huge investment from Russia.

“The Zambian economy will benefit from these investments if the Russian companies are given an opportunity to invest here,” said Ambassador Azimov. “I hope the Zambian government will use this chance.”

Labels: FDI, MINING, RUSSIA

posted by MrK @ 6:25 AM