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Tom Miles, Gordon Bell06 Sep 2006 13:50
Russian President Vladimir Putin presided over more than a billion dollars of new deals in Cape Town on Wednesday and predicted a wave of others in a powerful economic foray into South Africa.
“In Russia we have great respect for the economic achievements of South Africa,” he told President Thabo Mbeki at a business forum in Cape Town which marked a new relationship between two of the world’s biggest emerging market economies.
Deals signed at the forum included a billion dollar investment in a manganese plant by Russian tycoon Victor Vekselberg and cooperation agreements between state-owned Vnesheconombank and South Africa’s Industrial Development Corporation and Nedbank.
South Africa’s De Beers, the world’s biggest diamond producer, signed an agreement with Russia’s Alrosa to examine joint prospecting and exploration in Russia and other regions.
Together the two groups account for 75% of the global diamond market.
Russian Natural Resources Minister Yuri Trutnev said aluminium firm Rusal was considering building a smelter in South Africa, although Rusal denied it.
Outlining his shopping list of possible future projects, Putin also listed tourism and investment in a plant to assemble Russian minivans.
“We are also interested in your experience of turning gas into synthesised fuel,” he said, referring to a project by South Africa’s Sasol.
‘Billions of dollars’
“If we follow this trajectory we will be talking about billions of dollars,” Putin said.
De Beers chairperson Nicky Oppenheimer told Reuters the diamond deal was “a commitment to look to see whether there are things we can do together in the prospecting field. We are keen to prospect in Russia”, he said.
Russia is booming so fast the government has started hoarding windfall oil money in a stabilisation fund to stop it fuelling inflation and disrupting the economy, and Russian firms in the energy and metals sectors have begun looking abroad for opportunities in the past year.
Putin’s visit, the first to sub-Saharan Africa by a Russian head of state, is clearly dominated by a drive to boost cooperation between the two mineral-producing superpowers.
He is accompanied by 100 business leaders.
The delegation included Alexander Abramov, director of Russian steel firm Evraz, and the head of small state-owned oil firm Zarubzhneft, Nikolai Tokarev, as well as Trutnev.
Moscow has long historical ties with South Africa’s ruling African National Congress (ANC), many of whose leaders received military training in Russia during the battle against white minority rule that ended in 1994.
But Putin has made clear that his two-day visit, which ends later on Wednesday, is motivated more by hard-headed economic considerations than nostalgia.
“We consider the relationship to be a strategic partnership,” Mbeki said.
“We can look at what it is we can do together that will benefit both countries, both peoples,” Mbeki said. “Both governments would be very keen to give all the necessary support so that we can achieve progress in that regard.” - Reuters
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