* Shunned by the West, Zimbabwe seeks loans from China
* China covets Zimbabwe's mineral resources
HARARE May 6 China wants Zimbabwe to use
mineral export earnings as guarantee for a possible financial
package to the impoverished southern African state, which is
desperately seeking money to revive its wobbling economy, local
online media reported on Tuesday.
Zimbabwe, whose economy is slowing down due to shortages of
capital and foreign investment, requires $27 billion - more than
twice the size of its economy - to fund an ambitious five-year
plan to improve basic services and rebuild the country.
In February, Finance Minister Patrick Chinamasa said he
expected Zimbabwe to conclude negotiations for comprehensive
financial aid with long-time ally China in three months.
Han Bing, economic and commercial counselor at the Chinese
embassy in Harare told online news agency The Source in an
interview that Export and Import (Exim) Bank of China and
officials from Zimbabwe's ministry of finance were working on a
possible financial deal.
"We are discussing whether we can take proceeds of sales for
some minerals as collateral for the loans," said Han.
"The (Exim) bank and the team from the ministry of finance
are now working at a technical level on how they can set up such
a mechanism, how much the collateral would be and how much loans
they (Zimbabwe government) can get."
Han did not say how much China was willing to lend to
Zimbabwe. He could not be reached for comment on Tuesday.
Shunned by Western governments and funding institutions such
as the World Bank because of its failure to repay more than $10
billion in debt, Harare is looking to China for financial help.
China, meanwhile, covets Zimbabwean mineral resources. The
landlocked country has the world's second-largest reserves of
platinum along with huge deposits of gold, alluvial diamonds,
coal and chrome.
Han said Chinese loans to Zimbabwe amounted to $1.5 billion
over the last three years.
These would include a $700 million loan deal signed in 2011,
the biggest such package to date and another $320 million agreed
with Exim Bank of China last November to expand Zimbabwe's
Kariba hydro-power plant by 300 MW.
Official figures showed that earnings from mineral exports
reached $1.97 billion in 2013, more than half of total exports.
"We are asking for collateral because it's in accordance
with rules and regulations when granting any loan. This is the
concept that we are now discussing with the government," said
(Reporting by MacDonald Dzirutwe; Editing by Mark Potter)