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Minister of Foreign Affairs, Nkosazana Dlamini Zuma to co-chair Seventh South Africa–Russia Intergovernmental Committee on Trade and Economic Co-operation
20 May 2008
South African Minister of Foreign Affairs, Dr Nkosazana Dlamini Zuma will, together with Russian Minister of Natural Resources Yuri Trutnev, co-chair the seventh South Africa–Russia Intergovernmental Committee on Trade and Economic Co-operation (ITEC) in Moscow Russia from Thursday to Friday, 22 to 23 May 2008.
Minister Dlamini Zuma will co-chair the seventh session of the South Africa – Russia ITEC within the context of South Africa's priority to consolidate and strengthen bilateral political, economic and trade relations with a view to enhancing North-South dialogue.
In this regard, bilateral trade and economic relations with the Russian Federation are governed under the umbrella of the ITEC and this mechanism is likely to continue to enhance mutual beneficial trade and economic ties between the two countries.
Ministers Dlamini Zuma and Yuri Trutnev met in Moscow in February this year to prepare for the seventh South Africa – Russia ITEC.
The seventh South Africa–Russia ITEC is expected to assess the current status of and prospects for bilateral trade-and-economic co-operation. Status reports in the following areas of co-operation will also be received:
* the Sub-Committee on Agriculture
* the Sub-Committee of Education
* the Sub-Committee on Social Issues (Health and Medical Science)
* a Sub-Committee on Trade, Investment and Banking
* a Sub-Committee on Science and Technology
* a Joint Sub-Committee on Minerals and Energy
* a Joint Sub-Committee on Transport; and
* a Joint Sub-Committee on Water Affairs and Forestry.
Minister Dlamini Zuma is expected to depart from Russia on Sunday, 25 May 2008 for Yokohama, Japan ahead of the fourth session of the Tokyo International Conference for African Development (TICAD), where she will join President Thabo Mbeki.
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.
2005
South African Imports: US$629 047 000
South African Exports: US$449 274 000
Total: US$1 078 321 000
2006
South African Imports: US$1 895 876
South African Exports: US$675 800 000
Total: US$677 695 876
2007
South African Imports: US$2 283 517
South African Exports: US$237 831
Total: US$240 114 517
The bulk of SA exports are made up of vehicle engines (18,8% of exports); machines and 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 Black Economic Empowerment (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 and 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.
Enquiries:
Ronnie Mamoepa
Cell: 082 990 4853
Issued by: Department of Foreign Affairs
20 May 2008