The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

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.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree