THE development of Darwendale, one of Zimbabwe’s largest platinum group metal (PGM) prospects, has been thrown into doubt as lenders don’t want to be connected to a venture which has Russian economic interests at its heart.
According to a report by Bloomberg News, the site of the deposit has been abandoned since the beginning of last year and its backers are finding it difficult to attract new capital. Vitaliy Machitskiy’s Vi Holding, which has a 50% stake, is reluctant to continue investing after years of delays, the newswire said.
Darwendale has been tied to Russia since 2006 since a concession owned by Impala Platinum was taken expropriated by former Zimbabwe president, Robert Mugabe, who handed it to Russian investors. The first venture to try and tap the deposit was named Ruschrome Mining – it included a state-owned mining company, the Zimbabwe Mining Development Corporation, Russian defense conglomerate Rostec, Vnesheconombank and Vi Holding, said Bloomberg News.
Kuvimba Mining House, which owns 50% of the project and which the government says it controls, has been unable to attract fresh investment because European platinum buyers don’t want to enter into purchase agreements with an entity with Russian shareholders.
The fear of running up against sanctions stemming from Moscow’s invasion of Ukraine means it’s also harder to borrow money to develop the project, it said citing people familiar with talks regarding the project.
Darwendale could potentially produce 860,000 ounces of PGMs a year and the deposit could be exploited for four decades. Output was initially expected to begin in 2021, but Russian links and a lack of capital aren’t the only things that have delayed the project.