Deputy President Mlambo-Ngcuka to host First Deputy Prime Minister of Russia Sergei Ivanov

Pretoria – South African Deputy President Phumzile Mlambo-Ngcuka will hold bilateral political, economic and trade discussions with the First Deputy Prime Minister of Russia Sergei Ivanov on Monday 10 March 2008 at the Union Buildings in Pretoria. 

First Deputy Prime Minister Ivanov is expected to be accompanied by Russian Minister of Natural Resources Yuri Trutnev who is, together with South African Foreign Minister Dr Nkosazana Dlamini Zuma, the co-chair of the South Africa – Russia ITEC.

Deputy President Mlambo-Ngcuka will host First Deputy Prime Minister Ivanov within the context of South Africa’s priority to strengthen bilateral political, economic and trade relations with the Russian Federation. 

In this regard, relations between Russia and South Africa are driven through the Inter–sessional Intergovernmental Trade and Economic Committee (ITEC) which is made up of the following Joint Sub Committees:

  • Trade, Investment and Banking;
  • Minerals and Energy;
  • Transport –Aviation and Maritime;
  • Social Sector – Health and Education;
  • Agriculture;
  • Water Affairs and Forestry; and
  • Science and Technology.

Issues on the agenda of discussions between Deputy President Mlambo-Ngcuka and First Deputy Prime Minister Ivanov are expected to include, among others:

  • The status of bilateral political, economic and trade relations between the two countries;
  • Preparations for the ITEC that will be hosted by Russia in May 2008;
  • Developments in Russia following elections held on 2 March 2008 during which Dmitry Medvedev was elected as the incoming President;
  • A brief on developments within SADC and the broader African continent; and
  • Other issues of mutual interest.

While in South Africa First Deputy Minister Ivanov will also pay a courtesy call on President Thabo Mbeki.

First Deputy Prime Minister Ivanov is expected to depart from South Africa on 13 March 2008.

Bilateral Economic Relations

South Africa’s trade with Russia does not reflect its potential and there is much room for expansion.  The Joint South Africa-Russia Business Council provides an opportunity to achieve greater trade and economic co-operation between the business sectors of both countries.

  South African Imports South African Exports Total
2005 US$ 629,047,000 US$ 449,274 000 US$ 1, 078,3210,000
2006 US$     1,895,876 US$  675,800 000 US$ 677,695,876
2007 US$     2,283,517 Us$         237,831 US$ 240,114, 517


The bulk of SA exports are made up of vehicle engines (18.8% of exports); machines & mechanical appliances (14%); Fresh grapes (13.8%); flat-rolled products or iron (10%); pears (6.8%) peaches (3.4%) - amounting to almost 70% of SA exports to Russia. The major import from Russia, accounting for over 65% of SA imports is made up of the nickel group of minerals.

SA multinationals Anglo American, Standard Bank, De Beers, JCI, Barlowworld, Capespan and Bateman have substantial interests in Russia. In addition, to their existing plant in the Kaluga region, SAB/Miller has announced a new brewery which represented a US$100 million investment, and their product, Golden Barrel Beer, is highly successful in the local market.  Standard Bank also has a growing presence in Russia as well as SAPPI, Protea Hotels and Sun International. Mondi has recently also announced its intention to invest in the Russian Federation.

South Africa BEE entities held meetings with prominent Russian entities including Norilsk Nickel, Renova, Aton Capital, Colliers International, Rusimport, Transneft, MorPort, Sual, Lukoil, Interfinance Developments and Crystal Diamond Company.  The meetings were constructive and fruitful and a number of projects of mutual interest were identified.  The joint venture company, United Manganese of Kalahari (UMK), between Black Economic Empowerment groups and the Russian Renova Group of companies, has been established in order to co-operate on the prospecting, mining and processing of manganese ore in the Kalahari basin. Russia’s largest steel maker, Evraz, who held 24,9% of Highveld Steel & Vanadium, recently bought the remaining 29,2% owned by Anglo American which took its holding to 54,1% .  Evraz still holds the option of buying the 24,9% held by Credit Suisse. With almost 80% of the business under Evraz’s control, there are concerns that they would be too dominant in the vanadium market. 

Media Programme for the Incoming Visit by First Deputy Prime MINISTER SERGEI IVANOV, Monday 10 March 2008

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Pretoria
0001

9 March 2008

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