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Zimbabwe’s diamonds for Russian fuel

Zimbabwe’s diamonds for Russian fuel

Harare, February 3 - Neftegaz.RU. Russia’s Tatneft is eyeing Zimbabwe’s diamonds in a murky fuel-for-gems deal, which desperate officials in Harare believe will ease the acute shortage of the commodity, the Zimbabwe Independent reported.

Zimbabwe is in the throes of an intractable economic crisis and is experiencing severe fuel shortages compounded by an acute foreign currency shortage.

Russia already has interests in Zimbabwe’s abundant mineral resources, after government entered into a deal with Kremlin-controlled miner Alrosa in 2019, which is set to commence diamond extraction this year. Alrosa is the world’s largest diamond producer by volume.

Tatneft’s chief executive Nail Maganov was widely quoted by several Russian publications as confirming that the petroleum behemoth was mulling exchanging fuel for Zimbabwe’s diamonds in a deal Harare is desperate to clinch to ease an acute petrol and diesel shortage.

Erratic fuel supplies, coupled with prolonged power outages, have disrupted industrial operations, scuppering efforts to revive Zimbabwe’s comatose economy.

Maganov was speaking on the sidelines of the World Economic Forum in Davos, where Zimbabwe was represented by Finance minister Mthuli Ncube. Maganov was quoted by RIA Novosti suggesting that Tatneft was exploring strategies of securing Zimbabwe’s diamonds in a fuel exchange deal.

“We are dealing with this topic. This is a commercially long scheme. I want to say that this is a real story . . . I know that the fuel supply is real,” he said on the sidelines of Davos summit.

Reuters also carried the story this week, noting that: “The global agreement to curb oil output, known as the OPEC+ deal, brings more uncertainty to production investment plans, head of Russian mid-sized oil producer Tatneft (Maganov) was quoted as saying on Wednesday by Russian news agencies.

“Nail Maganov also said that Tatneft and other companies are considering exchanging fuel supplies to Zimbabwe for diamonds.”

RIA Novosti quoted Maganov as saying Tatneft was exploring the possibility of the firm supplying fuel to Zimbabwe, in a deal that will see Harare securitising its precious stones.

However, contacted by the Zimbabwe Independent for comment, Mines minister Winston Chitando said he was unaware of the development. “It is the 1st time I am hearing of that. The bottom line is that it is not true. I maintain that it is not true,” he said.

Under the reported deal, estimated to be worth around $1,4 billion, sources say Zimbabwe will be receiving fuel shipments from Tatneft through the Mozambican Port of Beira.

With Zimbabwe gripped in the throes of a debilitating economic crisis, characterised by an acute fuel shortage, prolonged power cuts and spiking inflation hovering around 520%, government has dangled its lucrative mineral treasure trove to investors to ease the challenges.

Zimbabwe has been desperately seeking a massive financial bailout package, among other solutions, from wealthy nations with an appetite for Zimbabwe’s abundant minerals such as China, Russia and the UAE.

2 years ago, Zimbabwe inked a $3 billion deal with Russia pivoted around a joint venture platinum project.Russian arms conglomerate Rostec partnered a Zimbabwean group in 2014 to set up the multi-billion dollar platinum project.

Last year, Mnangagwa visited Russia, where he sealed a number of deals ranging from collaborative geological exploration, mineral resource management, platinum mining and diamond exploration with his Russian counterpart Vladimir Putin.

Author: Tinashe Kairiza

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