SOUTH AFRICA: Russian president Vladimir Putin holds trade talks with South African leader Thabo Mbeki

Russian President Vladimir Putin met South African leader Thabo Mbeki on Tuesday (September 5, 2006) at the start of a visit intended to forge closer ties between the mineral and diamond superpowers. Putin went quickly into talks with Mbeki after arriving in Cape Town from Greece for a two-day visit. Despite long historical ties between Moscow and the ruling African National Congress (ANC), Putin is on the first visit to South Africa by a Russian head of state. Putin, who this year chairs the Group of Eight industrialised nations, will also talk with Mbeki about wider trade questions and other African issues. The former KGB spy will also visit Cape Town's Robben Island, the prison where former South African leader Nelson Mandela was held for almost 20 of his 27 years in jail during the apartheid years. But the visit is motivated by hard economic considerations more than nostalgia and Putin is accompanied by 100 business leaders hoping to build bridges between two of the world's biggest emerging market economies. The Kremlin said in a statement that investment firm Renova, owned by oil and aluminium billionaire Viktor Vekselberg, would sign an agreement on a ferro-alloy plant during Putin's visit. Renova has 49 percent of United Manganese of Kalahari, which it says has deposits of several hundred million tonnes of the metal. South Africa has 80 percent of the world's reserves of manganese, which is used in steelmaking. Putin will also oversee the signing of a memorandum of understanding between De Beers and Alrosa, the South African and Russian firms that account for around 75 percent of the world's diamond mining. The dominance of the industry by the two firms forced them to accept a deal with the European Commission in February, under which top producer De Beers agreed to phase out the purchase of rough diamonds from No. 2 producer Alrosa from 2009. Moscow was a leading supporter of the long battle against white minority rule, which ended in 1994. Many of South Africa's leaders, including Mbeki, received military training in Russia. Both states have evolved along parallel lines since the end of apartheid and the fall of Communism, as democracies struggling with social problems but blessed with mineral wealth. De Beers, 45 percent owned by mining conglomerate Anglo American, accounted for about half the world market in 2005. De Beers chairman Nicky Oppenheimer will meet Putin during his visit. Alrosa, owned by the Russian state, extracts nearly a quarter of the world's diamonds.

ITN Source | September 6, 2006

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