Putin Gets Down to Business in Africa

APSouth African National Assembly Speaker Baleka Kgotisile-Mbete, left, escorting Putin in Cape Town on Tuesday. The visit has emphasized economic ties.
CAPE TOWN, South Africa -- President Vladimir Putin, on the first visit by a Russian head of state to South Africa, agreed to deepen economic and political cooperation with the African powerhouse.

Putin said he and his South African counterpart, Thabo Mbeki, discussed what the two countries -- which hold similar views on many foreign policy issues -- could do for "the resolution of acute situations in Africa and the rest of the world."

No new initiatives on the Iranian nuclear standoff or the Middle East crisis were unveiled. But Mbeki said Russia had agreed to work closely with South Africa when it takes up its two-year seat on the UN Security Council next year.

Most of the meeting focused on closer economic and business links, Putin said.

He said Russia had foreign exchange reserves of $300 million and was eager to invest more in Africa.

One company planned to invest more than $1 billion in the South African economy, in manganese ores, he said. There were also plans for Russian investment to help South Africa develop electricity and build an aluminum smelter. He said an agreement had been reached to supply a Cape Town nuclear power plant with nuclear fuel until 2010.

In addition to an overall friendship and cooperation treaty, the two countries also signed agreements to extend cooperation in the medical field and space exploration.

Putin was accompanied by a heavyweight business contingent intent on forging closer links and boosting investment in the diamond, mining and metals sectors.

Trade between the two countries is tiny. South African exports to Russia totaled $130 million in 2004, with Russia replacing Britain as its biggest buyer of fruit. It imported just $9 million worth of goods from Russia, mainly nickel.

Putin pointed out that South African trade with European countries was worth around $6 billion to $7 billion.

"We have a lot of catching up to do," he said.

There is huge potential for closer business links because of Russia's thirst for raw materials, South Africa's need for investment and their joint domination of the diamond and platinum markets.


Mike Hutchings / Reuters
Putin conferring with South African President Thabo Mbeki on Tuesday in Cape Town on the first day of his visit.
Putin was to talk Tuesday with Nicky Oppenheimer, chairman of the De Beers group, the world's largest diamond mining company. Alexander Nichiporuk, president of Alrosa, the second biggest rough-diamond company, was to be part of the delegation. The two companies were the subject of an antitrust probe by the European Union into a 2001 deal whereby De Beers said it would buy diamonds worth $800 million from Alrosa every year for five years.

The EU in February forced De Beers to agree to stop buying diamonds from Alrosa beginning in 2009, to open up more opportunity for competition. De Beers controls about 60 percent of the world's rough-diamond supplies and produces 43 percent of world output.

Putin was due to make a brief visit Wednesday to Robben Island, where former President Nelson Mandela and other anti-apartheid leaders were once imprisoned. The Soviet Union was a powerful supporter of the underground African National Congress when it was banned by the white racist government. Mbeki received military training in Russia in 1970, as did other members of the current government.

Moscow, which used many African countries as pawns against the West during the Cold War era, has lost much influence on the continent to China. But in his state-of-the-nation address in May, Putin indicated that Russia wanted better relations with Africa.