The Zimbabwe National Army stepped in to provide collateral for the African Export-Import Bank’s $500 million loan advanced to Zimbabwe recently.
Bloomberg has reported that the loan, which will be paid over four years when production starts, is backed by a mine that Great Dyke Investments, a venture between Russian investors and the Zimbabwean military, plans to build at a cost of $4 billion.
The Minister of Finance, the central bank and their officials have refused to disclose the source of the money and the process done to acquire it.
Afreximbank, which is based in Cairo and is partially owned by African governments, has lent to Zimbabwe before. In addition to the gold-backed loan it extended a $600 million line of credit to the country in 2017. While the country is mired in an economic crisis, it has the world’s third-biggest platinum group metals deposits and abundant reserves of gold, iron ore, diamonds and lithium. It also has some of the most developed infrastructure in Africa and one of the region’s best educated work forces.
Bloomberg reports that the structure of the deal was decided earlier this month at a meeting attended by officials from Zimbabwe’s treasury, central bank, mines ministry, Afreximbank, and Great Dyke Investments chairwoman, Hespinah Rukato, the people said. The mine could produce about 800,000 ounces of platinum group metals a year if built.