RUSSIAN companies are actively looking to set up value-added businesses in South Africa to lift the low but rising volume of trade between the two Brics (Brazil, Russia, India, China and South Africa) partners, Russian ambassador Mikhail Petrakov said yesterday.
South Africa’s exports to Russia are dominated by raw minerals, but bilateral trade — at less than $1bn last year — is paltry.
But with Russia, a strong competitor for South Africa’s gigantic nuclear energy contracts, Moscow’s interest in Africa’s biggest economy is growing. "We view South Africa as a country with great potential in every sphere. The nuclear sphere is an important part of your future energy balance, and we see great potential in resolving these energy issues," Mr Petrakov told reporters in Sandton.
South Africa intends to build three nuclear power stations by 2030 to help meet energy needs. The first tenders are expected to be issued at the turn of this year.
The contracts will be worth hundreds of billions of rand in the long term. Russia will be up against competitors such as France, China and South Korea.
Russia and South Africa are still negotiating the update of their 2004 framework agreement on nuclear co-operation, Mr Petrakov said.
Such government-to-government agreements are usually pre-requisites for major commercial deals on civil nuclear projects.
"The document you mention is one that is in the line. I cannot comment on its contents. When it is ready and signed, then we can comment," the ambassador said.
France was hoping to have its new bilateral nuclear co-operation agreement with South Africa approved in principle during President François Hollande’s state visit here on October 14. That failed to happen, with French sources saying that South Africa wanted to wait until the text had been signed off by Euratom, a European nuclear agency whose approval was compulsory for France.
The decisions about South Africa’s civilian nuclear options are fundamental ones for the economy and foreign investors. In the foreground there are less valuable but still important non-nuclear investments in the offing for jobs-starved South Africa. There are several prospective projects. We encourage Russian companies to come and we know the government here wants value-added project," Mr Petrakov said.
"We understand the desire for investors not just to mine things but to beneficiate them," Yaroslav Shishkin, deputy head of the Russian embassy’s economic section, said. Russian statistics show that bilateral trade rose to $963m last year, sharply up from $625m in 2011 but still tiny compared to South Africa’s main trading partners. Two-way trade with China last year was worth about $20bn, for example.
