The Sunday Mail
Russia’s Foreign Minister Sergei Lavrov visits Zimbabwe this week in a development expected to give impetus to the US$3 billion Zimbabwe-Russia Joint Venture Great Dyke Platinum Project in Darwendale. The Sunday Mail’s Chief Reporter Kuda Bwititi interviewed Great Dyke officials, chairperson Hespina Rukato (HR) and CEO Igor Higer (IH) to get an update on the massive investment. Below are excerpts of that interview.
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Q: Can you provide an update on the status of the project?
IH: To date, an industrial base with infrastructure has been created at the field to start its development.
Large-scale geological exploration and complex ore studies of the deposit at 30 percent of the license area have been completed, which confirmed resources under Joint Ore Reserves Committee international standards of 17,6 million ounces or 550 tonnes of platinum group of metals.
This quantity allows continuous production for at least 35 years.
At the same time, it is only 40 percent of the estimated reserves of PGM from the total volume of 1 300 tonnes of the Darwendale deposit.
Q: How much money has been injected since you started and how much more are you going to invest?
IH: The investment into these stages alone is more than US$60 million. The strategy of the project implementation provides for the creation of a mining and processing complex mining up to 10 million tonnes of ore and production of 860 000 ounces (27 tonnes) of PGM per year.
Soon we will define our position regarding EPCM (Engineering Procurement and Construction Management) net contractor – the shortlist of potential suppliers has already been developed.
We are talking about the implementation of a full cycle of work: detailed design, procurement of equipment, construction materials, machinery, as well as further organisation and control over the construction of the facility.
According to our estimates the investment in the first phase the project construction is US$400 million.
Q: What is the plan for 2018?
IH: Our task number one is to sign the EPCM contract to launch practical implementation of the project and start constructing industrial facilities on the site.
We will also need to solve the issue of providing electricity – there have already been some efforts made together with the State-owned Zera (Zimbabwe Energy Regulatory Authority) and Zesa in this area. We are actively interacting with off-takers for products processing and marketing.
Q: Investors from around the world have welcomed the new political dispensation under President Mnangagwa. Have there been any developments on the Great Dyke project which has been precipitated by this new dispensation and the Zimbabwe-is-open-for-business thrust?
HR: The project has always been a priority for the Government of Zimbabwe, particularly within the context of the bi-lateral relations between Zimbabwe and the Russian Federation.
It is on a regular inter-governmental agenda.
As a demonstration of the importance of the project to Zimbabwe, the project was granted a special mining lease and assigned National Project Status.
I believe that supporting projects in this manner, particularly mining projects, is one of the key steps towards improving the investment climate and real openness of Zimbabwe to doing business.
Q: The project appears to be behind timelines you set at inception. What have been the challenges and how are you addressing them?
IH: Indeed, to some extent, we had some shifts, for about a year, according to the time schedule laid down in the bankable feasibility study for the integrated development of the field, which was prepared for us by the leading engineering company DRA (of South Africa).
But taking into account the enormous experience and expertise of DRA in this kind of projects, we earlier spared this year, bypassing the stage of preliminary feasibility study.
In addition, with all the advantages of EPCM-projects, the real effectiveness of project management directly depends on which contractor you choose. This is the issue which we treat most carefully when planning the EPCM project.
We have negotiated with more than 50 potential suppliers, who have the best reputation and internationally recognized experience in implementing such large-scale projects.
In parallel with these efforts, we were able to thoroughly elaborate on the issues of industrial and environmental safety, production efficiency, we carefully conducted all necessary tests on these aspects.
These are the key preparatory processes that need to be thoroughly approached and do not tolerate any haste.
Q: How is Mr Lavrov’s visit going to impact on the project?
HR Mr Lavrov visited Zimbabwe at the launch of the project in 2014. We see his visit as a consolidation of the friendship between the two countries.
The project is a demonstrable commitment to translating the political relationship into a strong economic one.
Q: What are the benefits of implementing the project for the Republic of Zimbabwe?
HR: We’ve managed to build a strong team of project contractors: the already mentioned DRA, as well as Loesche, the MSA Group, Metallicon in terms of engineering and technology, PwC, SFA Oxford as analytical support.
Cresco Project Finance and Ernst and Young are our financial experts.
We also aim to use the vast human resources and expertise available locally. I believe the synergies could bring an outstanding benefits to the Republic of Zimbabwe, which will create thousands of new jobs, will become a driver in technological, social and economic development.
