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By John Helmer in Moscow

South Africa’s Foreign Minister, Nkosazana Dlamini-Zuma, said there has been a breakthrough in negotiations with the Russian government over terms for the Russian space agency to launch a South African communications satellite.

She said she hopes to “see the launch of the satellite by the end of this year.” Dlamini-Zuma headed a delegation of more than 30 South African officials and businessmen in Moscow for a 2-day session of the bilateral intergovernmental committee on trade and economic cooeration (ITEC).

Ronnie Mamoepa, the Minister’s spokesman, told Business Day/Weekender, that resolution of delays and disputes over the satellite launch was the “priority” of this week’s talks.

The Russian text of the protocol, which Dlamini-Zuma and Yury Trutnev, Russia’s Minister of Natural Resources, signed late Friday set a deadline of July “to finish consultations to find the solution to the problems connected to the launch of the satellite ZA-002”. Asked about the reason for the delays, Mamoepa said they were technical ones.

The text of the protocol indicated that problems remain between the two governments and businessmen on both sides, involved in the Kalahari manganese mining project. This involves the Renova group of companies, owned by Victor Vekselberg, who has publicly promised to invest a billion dollars in the project.

However, according to the document signed by Dlamini-Zuma and Trustnev, Vekselberg is financing the mine construction phase of the project, and there are problems with financing for the rest of the project on the part of the SA partner, United Manganese of Kalahari (UMK).

The government agreement reports the Russian side as having “serious concerns regarding the process of realization of the Kalahari Manganese Project.” UMK, according to the Russians, “did not agree to any of the proposed schemes of financing of construction of the mine and did not propose any alternative variants.”

According to Dlamini-Zuma, “by the end of June we should conclude the financing issues. I hope that deadline will be met. I know it’s taken a long time, but I think we are reaching the end of the tunnel.”

Early on Friday, Dlamini-Zuma met with Deputy Prime Minister Sergei Ivanov. He was in SA in March to negotiate on several sensitive issues, including the satellite launch contract. A source close to Ivanov told Business Day “we are not making the meeting public and won’t comment on the issues discussed.”

A spokesman for Roscosmos, the Russian space agency, said he was not in a position to say whether Roscosmos had participated in the talks with Dlamini-Zuma, nor what has been agreed.

Dlamini-Zuma acknowledged publicly that the SA-Russia Business Council, established in September 2006 at the time of then President Vladimir Putin’s visit to Cape Town, has not been working well. “We are aware of the problem,” Dlamini-Zuma said, “and we are solving it.”

According to SA trade figures, the turnover in trade with Russia has fallen by two-thirds between 2005 and 2007. Russian customs data show that turnover grew between 2006 and 2007. The two sets of statistics are relatively close in estimating turnover for last year at between $240 million and $290 million, most of it from SA exports to Russia of fresh fruit and machines.

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