Karo Resources Injects $4.2bn into Zimbabwe’s Mining Sector

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Cypriot investor – Karo Resources, has sealed a $4.2-billion deal with Zimbabwe’s government to develop a platinum mine and refinery.

The deal which was struck on Thursday, has been described by President Emmerson Mnangagwa as a sign of the country’s readiness for business.

Located in the Mhondoro-Ngezi platinum belt, west of the capital Harare, where Impala Platinum Holdings has operations, the project will include a coal mine and power station to produce electricity for the smelter, and should employ 15,000 people when fully implemented.

Keen to revive the mining sector after years of reticence by foreign investors during Robert Mugabe‘s regime, President Mnangagwa said the deal was a signal things had changed since his ascendency after Mugabe’s ousting in November.

“Zimbabwe is open for business and whoever stands in the way, hurting business in this country, will fall. It is not business as usual anymore, things have to change,” Mnangagwa said at the signing ceremony.

Minister of  Mines, Winston Chitando, signing the agreement with Karo Resources, said work would start in July, with the first output of platinum group metals expected in 2020. He said the target is to reach 1.4 million ounces annually within three years.

Mr. Chitando added: “This is the largest investment structure in the country’s mining industry in Zimbabwe. The landscape of Zimbabwe’s mining industry will never be the same.”

Zimbabwe holds the world’s second-largest platinum deposits after neighbour South Africa but foreign investment had stalled during the latter years of Mugabe’s reign.

Earlier this week, the government amended the Mugabe-era Indigenisation and Economic Empowerment Act, which aimed to increase black Zimbabweans’ ownership of mines by preventing foreign entities holding majority stakes.

The revised law removed that proviso for most categories of mining, but not diamond and platinum mines.

Chitando said Karo Resources was expected to comply with the empowerment law by giving up majority ownership in the project.

 

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