Zimbabwe President Robert Mugabe.

Harare - A Zimbabwe-Russia joint venture company, Ruschrome Mining, plans to invest $1.6 billion (R17 billion) in developing a platinum mine and constructing a smelter and refinery in the African state, the state-owned Herald newspaper reported on Tuesday.

Zimbabwe holds the world's second-largest known platinum deposits and two of the biggest producers of the metal, Anglo American Platinum and Impala Platinum Holdings, have operations there.

The state Zimbabwe Mining Development Corporation and a consortium of Russia's Vi Holding, defence conglomerate Rostec and Vnesheconombank, jointly own Ruschrome.

The Herald, which reflects government policy, quoted mines minister Walter Chidhakwa as saying the parties would sign an agreement in Harare next month, with mining operations scheduled to start early next year.

The first phase of the deal would include developing the mine and constructing a concentrator at a cost of $500 million, while a platinum refinery would be built in the final phase.

“The base metals and precious metal refinery is something that we are still in the process of finalising,” Chidhakwa told the newspaper.

He was not immediately available for comment on Tuesday.

Officials from Rostec, Vnesheconombank and Vi Holdings were also not immediately reachable.

Construction of houses, office blocks and roads at the mine in Darwendale, about 70 km (43 miles) west of the capital Harare, was already underway, the Herald reported.

Russian newspaper Kommersant reported in June that Ruschrome was carrying out exploration in the Darwendale block to verify whether it had any platinum reserves.

Zimbabwe has three platinum blocks stretching along a 550 km mineral range known as the Great Dyke.

Implats, whose local unit Zimplats is the largest platinum producer in Zimbabwe, owns the biggest block, while Amplats has the smallest.

Zimbabwean President Robert Mugabe, who won another disputed election a year ago, has struggled to attract external investors, because of his government's policy of forcibly transferring majority shares in foreign-owned companies to locals. - Reuters