New era for SA, Russian business
11 September 2006
Russian President Vladimir Putin's recent visit to South Africa could mark the start of a new wave of investment in the country by Russian companies.
The Russian leader, on the first ever visit to sub-Saharan Africa by a Russian head of state, stressed the economic importance of his delegation's visit to South Africa after talks with President Thabo Mbeki in Cape Town last week.
"It's true that we are considering major projects worth billions of dollars in investments," he told journalists at a media briefing on Tuesday.
Putin said the 100-strong, top-level business delegation that accompanied him on his two-day state visit was looking at ways to make this practically possible.
Long-term projects under consideration, according to the SA Press Association, were in the fields of mining, energy, aluminium smelting, the supply of nuclear fuels for peaceful purposes, agriculture, chemicals, oil and gas, and military technology.
Space exploration
During his visit, Putin offered South Africa the use of his country's spacecraft to launch satellites, as well as Russian expertise in micro-gravity and satellite navigation, while Russian and South African companies entered into a number of cooperation agreements.
The offer came a day after the two countries signed an agreement on "co-operation in the exploration and use of outer space for peaceful purposes".
At the signing, President Thabo Mbeki said that South Africa would be using Russian rockets and expertise to launch micro-satellites into space in December as the country moved to "catch up with the rest of the world" in the use of this technology.
The launch of South African satellites and activities such as remote-sensing of the earth formed just one area of the planned co-operation in space between the two countries, Putin said at the start of a round-table meeting of South African and Russian businessmen and government officials in Cape Town on Wednesday.
Delegates at the meeting included Viktor Vekselberg, the chairperson of the Renova group of companies, Business Unity South Africa chairman Patrice Motsepe, and leading South African business people Tokyo Sexwale, Nicky Oppenheimer and Maria Ramos.
SA, Russian business council
Accompanied by Mbeki at the round-table, Putin outlined a number of other potential areas of cooperation, including the construction, engineering and design fields, as well as uranium production for nuclear energy.
Geological exploration and prospecting of mineral resources was another area of potential cooperation, the Russian president said, adding that plans were in place for the supply of liquefied petroleum gas and nuclear fuel to South Africa, which is undergoing an upgrade of its energy capacity.
Putin said he placed great hopes on greater economic interaction between South Africa and Russia, and welcomed the emergence of a business council currently being set up by the chambers of commerce of the two countries.
An agreement on the business council, which Mbeki said would greatly facilitate interactions between SA and Russian businesses, was signed on Wednesday by Vekselberg and Motsepe.
Putin repeated Russia's conviction to look at investing billions of dollars in South Africa, at a time when Russia's gold and foreign exchange reserves top the US$300- billion mark and the country's economy is growing at a rate of 7.4%.
Other agreements
Other agreements signed during Putin's visit include an arrangement between Russian state-owned bank Nvesheconombank and South Africa's Industrial Development Corporation (IDC).
South African retail bank Nedbank also signed an agreement making it the preferred commercial partner of Nvesheconombank, in line with the broader co-operation framework signed between SA and Russia aimed at strengthening trade and investment between the two countries.
On the same day, diamond giants De Beers (SA) and Alrosa (Russia) signed an agreement to examine opportunities for carrying out joint diamond prospecting and exploration activities in Russia and, in due course, other regions of the world, including Africa.
Russia's Renova group, South African state transport company Transnet and United Manganese of the Kalahari also signed an agreement to facilitate the rail transportation of manganese ore as well as coal and other raw materials to a ferro-alloys smelter.
A similar agreement was signed between Renova and SA electricity utility Eskom for supply capacity for a manganese mine in the Northern Cape province.
Renova plans to invest US$1-billion over five years in a manganese mine, a smelter and related infrastructure in SA.
Long-term commitment
Mbeki said that Russia's long-term commitment to South Africa
was underlined by the establishment of a vocational training facility, with the involvement of Renova, to build up a skills base for its South African manganese mining operations.
"For us that constitutes a very important response to an urgent need," Mbeki said, adding that an increase in skills in South Africa would make "a critical contribution" to the levels of employment in the country.
At a state dinner hosted by Mbeki in Cape Town on Tuesday night, Putin said that SA-Russian trade was considerably below the current levels of SA trade with most of the rest of Europe, noting that there was a lot of "catching up" to do.
The time was right to formalise the "mutual affinity" between the South African and Russian people, he said, adding that Russia and South Africa's approaches to the resolution of many international issues were "close and well attuned".
He said the two countries were ready for "the closest possible interaction" on the political front, as well as in trade and economics.
Mbeki, in his toast at the banquet, noted that South Africa's "strategic relationship" with Russia had ensured that the two countries had been able to co-operate on major global issues, and would continue to do so.
SouthAfrica.info reporter and BuaNews
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