Russia seeks Africa mega-deals, firms lukewarm

MOSCOW (Reuters) - Russia hopes for a package of energy and metals deals with African states, a ministry said on Friday, as a government delegation left for South Africa and Angola, but some Russian firms deny having any such plans.

Russia seeks to regain strong positions it enjoyed in Africa in Soviet times when it splurged billions of dollars to support regimes calling themselves Marxist or friendly to Moscow.

But staging a foray of its private capital into the continent now, Moscow will have to compete with countries like China for a chunk of lucrative business opportunities.

Russian Prime Minister Mikhail Fradkov on Thursday took high-level government officials and business chieftains on a five-day tour of Angola, Namibia and South Africa, which follows last year's visit by President Vladimir Putin.

Putin pledged billions of dollars in investment during his trip. Fradkov's delegation includes executives from aluminium firm RUSAL, gas monopoly Gazprom, oil firms LUKOIL and Rosneft and diamond miner Alrosa.

Alrosa, which last year signed a pact with the world's No. 1 diamond producer, South Africa's De Beers, is likely to strike the largest number of deals, Russia's Natural Resources Ministry said in a statement.

In South Africa, Alrosa will seek to boost cooperation in diamond exploration and clinch new deals to jointly explore for oil and gas and build new pipelines and power facilities.

In Angola, where it is already involved in a large diamond venture, Alrosa will seek agreements on a number of power generation projects, the statement said.

Other potential deals by Russian firms include a project to build a fertiliser plant in South Africa, energy exploration memoranda with Angola and joint uranium prospecting with Namibia.

COMPANIES DOUBT MEGA-DEALS

Apart from Alrosa, Rosneft and RUSAL will also sign a number of high-profile deals, the ministry said, but the firms denied they had such immediate plans.

The ministry said Rosneft, Russia's second largest oil producer, and South African firms SASOL and PetroSA will agree to jointly build Russia's first gas-to-liquids (GTL) plant.

Rosneft spokesman Nikolay Manvelov said the firm was in principle interested in GTL technology. "But no concrete projects are being discussed with South African firms," he said.

Confusion also clouded Russian metals companies' plans.

The ministry said South Africa and Russia's top aluminium firm RUSAL were considering building a 750,000-tonne-a-year smelter and a 1,300 megawatt power station.

"South Africa is one of the countries presenting potential interest to our business development, but today we have no concrete projects in that country," said a RUSAL spokeswoman.

RUSAL, the world's No.3 aluminium producer, will soon become the world's top producer of the metal after merging with smaller Russian rival SUAL and aluminium assets of trader Glencore.

By contrast, Russia's second aluminium producer, SUAL, has said it is interested in taking part in the South African smelter project if it can secure sufficient energy resources.

An investment vehicle of SUAL's owner Viktor Vekselberg, Renova, owns 49 percent of South Africa's United Manganese of Kalahari.

It is involved in a project to build a pit with an annual capacity of 1.5-2.0 million tonnes of manganese ore and a ferro-manganese plant with the initial capacity of 250,000 tonnes of the metal.

But the ministry's statement said the project "was facing problems with the energy supplies and railway communications between the mine and the plant." A Renova spokesman denied the existence of problems in the project.

It also said Renova was considering joint ventures in South Africa and Namibia to prospect for uranium ore, coal, platinum group metals and other minerals.