Russian Mining Firm Pulls Out Of Zimbabwe Platinum Mine

Kuvimba Mining, Zimbabwe's state-owned mining company, is to acquire a 50% stake in a platinum project owned by Russia's Vi Holdings and plans further mining acquisitions, according to the country's finance ministry.

The Darwendale platinum mine will cost about $3 billion to develop, making it Zimbabwe's largest platinum mine. Vi Holdings pulled out of the Darwendale platinum mine, ending Russia's 16-year involvement in the project.

The government of former Zimbabwean President Robert Mugabe and Russian investors were invited to acquire the mine from South Africa-based Impal Platinum Holdings Ltd. in 2006.

The withdrawal of Russian investors, while giving the government more control over platinum assets, shows the difficulties the country faces in attracting investment into its mining sector and kick-starting its ailing economy.

Vi holdings' withdrawal follows sanctions imposed on Russia over the war in Ukraine.

Vi holdings said the withdrawal was "to create favourable conditions for the further development of the project". The decision was also "linked to the global sanctions imposed on Russia by Western countries, which naturally also applies to Russian investments abroad," the statement said.

The platinum mine is held by Great Dyke Investments, an equally owned joint venture between Vi and Kuvimba.

Development of the platinum mine is understood to have stalled due to a lack of funding and potential buyers of the mine, which could produce 860,000 ounces of platinum group metals a year, have been reluctant to enter into a purchase agreement with a Russian-owned company.