Story that China is Buying up Zimbabwe Platinum Reserves Denied

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Precious Metals

Building on a legacy of questionable involvement in Africa, the Chinese are at it again in Zimbabwe. In their drive to secure raw material supplies, the Chinese have dealt with some pretty unsavory regimes over the years, showing an equal sense of realpolitik to the western powers dealings with various African and South American dictators in the second half of the 20th century. Following on the heals of oil deals in Sudan and copper deals in the DRC, China is now reported to be doing deals with the Zimbabwe regime to secure platinum supplies on the cheap according to a Reuters report in the Guardian newspaper. The story appears to have first broken in the Zimbabwe Independent but in the online service the report is supposedly denied by the Minister of Finance Tendai Biti.

What is equally unclear yet is whose platinum resources they are supposed to be buying. There is much talk about the $5bn the Chinese are supposedly paying for 50% of a $40bn platinum resource. Yes good maths isn’t it, in the words of a senior Ministry of Finance official. It’s a major deal but a financial rip-off in many respects. reported in the Zimbabwe Independent. The Chinese are said to be delighted with the deal, the Zimbabwean government are said to be sulking. One problem is after years of broken promises, flouting every legal rule in the book and outright appropriation of assets, few foreign investors are willing to deal with Zimbabwe. This may be why the government is discussing bringing in a law to deal with assets and mining rights owned by foreign firms along the lines of use it or lose it. Western firms even in neighboring South Africa have halted or slowed production at many mines as power has failed, infrastructure has broken down and inflation has become stratospheric. One of the key players in Zimbabwe includes Impala Platinum Holdings (Implats); the world’s second largest producer of the metal, which has the biggest mining investments in Zimbabwe, the firm has declined to comment on developments so far. Its bigger rival Anglo Platinum and Rio Tinto are also keeping a low profile possibly fearing their mineral rights will be appropriated to give to the Chinese.

Anything is possible in Zimbabwe. Anything that is, except the possibility they have suddenly found a new mineral ore body with a value of $40bn that no-one knows about. Whether the Chinese have done a deal or not remains to be seen but one thing is for sure -their embassy in Harare has been busy of late and they will no doubt come away with more than a bargain whatever they buy.

–Stuart Burns

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