GDI: Driving force for Zim-Russia relations

13 Dec, 2020 - 00:12 0 Views
GDI: Driving force for Zim-Russia relations

The Sunday Mail

THE Zimbabwe-Russia joint venture platinum concern, Great Dyke Investments (GDI), which is located in Darwendale, is making stellar progress and is earmarked to become one of Zimbabwe’s largest platinum mines. Last week a local company, Fossil Mining, bought 4,4 percent stake in the project, while total funding of up to US$650 million has been lined up for the venture over the next two years. Our News Editor Kuda Bwititi spoke to GDI vice chair Mr Igor Higer to unpack the aforementioned and other issues related to the massive investment.

Q: 2020 has been a tough year. What are some of the challenges that you have faced and how have you tackled them?

A: Thanks to the overwhelming support that GDI has been receiving from the Government and Zimbabwe’s authorities, the company, despite all challenges of the year, has advanced well in the Darwendale project over the last 12 months. So I can safely say, all challenges that we may have faced have been overshadowed by the support we have received from Government. Among the most salient achievements to mention are the commencement of early works and construction on the mine site. Some of the works that we carried out include setting up the boxcuts, building infrastructure, as well as ancillary facilities.

Q: Can you explain the support you have received from the Zimbabwe Government?

A: The National Project Status (NPS) conferred to GDI in 2015 is applied to projects in recognition of huge capital investments, the complexity and nature of investment risks and the social-economic benefits, among others. As a support measure, the NPS provided GDI a partial relief on withholding tax and customs duties on imported equipment.
Most importantly we need to emphasise the extraordinary support GDI has been receiving from the Zimbabwean Government and authorities all these years which contributed a lot to our joint efforts to bring the Darwendale project to production so that the project could start bringing benefits to the country of Zimbabwe and all the stakeholders.
GDI considers the significant progress in the integrated development of the Darwendale platinum group metals deposit reached to date as a tangible result of robust and joint efforts of the Zimbabwean and Russian partners.
Both sides are determined to fulfil the agreements made by President Vladimir Putin and President Mnangagwa in Moscow in early 2019. As remarkably highlighted during the meeting of President Putin and President Mnangagwa, the Darwendale project is a locomotive and driving force of the whole process of cooperation between our two countries.

Q: What is the support you have received from the Russian side?

A: Vi Holding Group — a Russian investor of the project — supported the project not only financially through the most risky early phases of the project implementation, in particular, exploration, project definition and feasibility study. Vi invested in total circa US$ 70 million, but also has been providing additional expertise and skills (both technical and financial) when required to ensure the project is implemented efficiently and according to the best industry practices.

Q: What are the latest developments in terms of constructing the mine?

A: Shotcreting activities at Boxcut 1 are currently underway, the work is targeted for completion in the second week of December 2020, and excavation was completed earlier this year. Boxcut 2 excavation is almost done. Portal 1 decline development is in process. All engineering works, FEED (Front End Engineering Design) and detailed engineering are slated for completion in the first quarter of 2021 so as to allow the project to move into a full-scale construction phase and long-lead items procurement.

Q: Tell us about the massive infrastructure development taking place in Darwendale as a result of the project?

A: Infrastructure development, among most salient factors, will include new roads construction/renovation and upgrading of existing network.
There is also going to be construction of a new 330kV overhead power transmission line (2×11.5km, 330kV, 963MVA, Cut In/Cut Out on Alaska-Warren Line) and ancillary facilities/substations, and a housing project which will aim to achieve a sustainable and affordable housing solution to categories of the working population of the mine. This is in line with the view that a better housed workforce includes greater labor stability and improved productivity.

Q: This (last) week, Fossil Mining bought a 4.4 percent stake in GDI. Can you please explain what this development means for the project?

A: The Fossil Group comprises a number of market leading organisations in the areas of construction, mining and agriculture with a solid footprint across Zimbabwe. In accordance with the agreed terms, Fossil will invest US$ 30 million into GDI’s shared capital in exchange for a 4.4 percent stake, valuing the company at US$680 million. Aside from the monetary investment, Fossil will also provide the engineering, procurement and construction services with respect to the Darwendale Project. Negotiations on such services agreement(s) between Fossil and GDI are being conducted. This transaction with a local Zimbabwean partner shows high level of interest to the Project inside the country.

Q: Since the project commenced, how much has been invested?

A: Up to now, overall investments into the project implementation have exceeded US$100 million (including about US$ 70 million made previously by the Russian shareholder).

Q: GDI has created a lot of jobs since it started operations. How many workers do you have now?

A: During 2020 GDI has had a total workforce of up to 500 people which include around 100 direct employees and 400 who are on contracts.

Q: How many workers do you hope to employ when the project becomes full throttle?

A: Once the Phase One of the project is fully ramped up/at steady state (the mill throughput reaches its nameplate capacity of 295 kilo tonnes per month / 3.54 million tonnes per annum), total GDI workforce will reach circa 1,700 employees. Most of contractors and almost all employees are local employees, expect few expats.

Q: Previously you have indicated that the resource at GDI could be one of the most economical to mine in the world. Is this the same position?

A: Darwendale’s total Proven and Probable reserves of 7.8 million 4E ounces (@ 2.87 g/t 4E grade), shallow dipping orebody, fully mechanised bord and pillar method of mining, standard milling-milling-floatation processing flowsheet widely employed across the region and globally for platinum group metals production — all these factors will ensure the total cash cost (TCC) of the project to be close to the current industry leaders like Zimplats and Mimosa that extracting metals on the same Great Dyke in Zimbabwe.

Q: How will the project contribute to the target to raise US$12 billion revenue from mining by 2023?

A: Total capital to bring the Darwendale Phase 1 to production is projected above US$ 650 million which is to be invested during 2021-2022. Starting from year 2023 average annual revenue of the Darwendale is expected to be more than US$ 350 million.

Q: Any last words sir?

A: In terms of Corporate Social Responsibility, we have made several donations in 2020, especially to the local community in Norton/Darwendale. We will continue to do so during this festive season. We are taking this opportunity to wish Zimbabweans a Merry Christmas and a Happy New Year. We hope that all Zimbabweans will keep safe and well. We also hope that the New Year, 2021, will bring us positive changes and developments, both within our businesses and personally.

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