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Where China stays below the radar

Zimbabwe’s position as a source of minerals and metals is not disputed. It has the second-largest known platinum reserves and is the world’s third-largest producer of the metal. It also has big reserves of diamonds, nickel and coal. However, the country’s controversial political position has made it untouchable for many western investors. Much diamond production falls foul of the Kimberley Process Certification Scheme, which certifies so-called non-blood diamonds for export.

Investors in western countries are also alarmed by the government’s indigenization policy, which requires any foreign company worth more than $500,000 investing in the country to have a local partner with a 51% stake. As a result Zim­babwe has few western investors. But where westerners have left, it is widely believed that China has stepped in. David Ellwood, founder of Metmar Minerals, says bluntly: "The Chinese are not nervous about Zimbabwe. Everyone else in the world is. When everyone wakes up to what’s happening in Zimbabwe, all the opportunities will be gone. The people who are investing in Zimbabwe are going to have a position that no one else is going to be able to get. There is a limited number of quality assets in Zimbabwe. These are all being gobbled up at the moment."

Metmar needs between $100 million and $200 million to develop its chrome mining assets in Zimbabwe and is talking to Chinese investors. Ellwood says: "Chinese investors never do things on their own. They’ve got plenty of money, but it is sovereign fund money, and they will always have a Chinese government department overseeing all these operations."

Ellwood adds that China’s position in Zimbabwe is now so secure that the local government would "not dare to influence their ownership or policies.

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