Cape Town — Agreements signed yesterday on the final day of Russian president Vladimir Putin's official visit to SA have given a significant boost to a $1bn manganese project by Russian firm Renova.

The agreements signed include one with Transnet to transport ore to Coega from the United Manganese of Kalahari (UMK) mine at Kuruman, a joint venture between Renova and UMK.

Renova would also build a ferroalloys smelter at Coega expected to produce up to 3000 tons of alloy, said Russian billionaire metals magnate Viktor Vekselberg, owner of US-registered Renova, yesterday.

The agreement with Transnet also commits it to provide rail transport for coal and other raw materials to the smelter.

Vekselberg said a memorandum of understanding had been signed with Eskom to supply energy to the manganese mine and the ferroalloys smelter, and with the Coega Development Corporation to provide land for the smelter in the Coega industrial development zone.

The agreements form part of a raft of other agreements signed by a number of Russian businessmen travelling with Putin, including a cooperation agreement between Russian diamond giant Alrosa and De Beers and a commercial trade finance and funding co-operation deal between Nedbank and Russian state-owned bank Vnesheconombank. They were announced after the formation of a joint SA-Russia business council which is to drive investment between the two countries, following a round table discussion led by Putin and President Thabo Mbeki yesterday.

It also emerged yesterday that two Russian companies, Sual Holdings, owned by Renova, and Rusal, were standing in the wings and eyeing the $2,7bn aluminium smelter project at Coega, according to the Russian Natural Resources Minister Yuri Trutnev and Vekselberg.

Any further move on this front depends on the outcome of negotiations between Eskom and Alcan, the Canadian aluminium giant which has been planning to build the smelter and has first call on the project. Alcan wants guarantees from Eskom for the long-term supply of energy to the plant. Alcan is expected to make a final decision on the project at the end of the month.

Vekselberg said the overall investment in the manganese and ferroalloys plant amounted to $1bn over five years and that more than 200 prospecting holes had already been drilled at Kuruman.

By mid-2007, a feasibility study will have been completed for the mine, expected to have a capacity of 2 to 3-million tons of ore.

He said Renova was completing a pre- feasibility study for the ferroalloys smelter.

Trutnev said Russia was also concentrating on co-operation with SA in the nuclear energy field. A "high tech" meeting between the countries would further explore this co-operation. The meeting would be attended by the chairman of Russia's atomic energy institution.