Cape Town - Russian businesses are set to invest billions of dollars in South Africa, President Vladimir Putin said Wednesday, as top corporate leaders signed agreements in the mining, diamond and banking fields.

"The distances are long physically, geographically. The South African business community and the Russian business community for a long time had no connection. So in a sense we had to build from virtual zero," he said.

"But I think we can and must look at the business opportunities and what we can do together to benefit both countries, both peoples" Mbeki told a conference bringing together the biggest and most powerful names in South African and Russian business.

The former Soviet Union was the most influential supporter of the South African anti-apartheid movement, providing exile, education and military training for many of the country's current leadership.

But after the collapse of the Soviet Union it became engrossed in its internal upheavals and painful transition to a market economy, and watched from the sidelines as China established itself as a major player in Africa.

Putin, who bought dozens of Russian business leaders with him on the first visit to South Africa by a Russian leader, said that was about to change.

Emphasising that Russian economic growth tops 7%, and that gold and foreign exchange reserves have grown by $80bn in the past seven months, Putin reeled off a stream of areas of potential investment and cooperation.

He said Russia hoped to boost supplies and technology for South African nuclear power plants and would allow it to take part in the activities of Russia's nuclear research institute.

He spoke of hopes for more investment in the oil, natural gas and electricity markets, with plans for a Russian company to build an aluminium smelter in South Africa.

Tourism, transport, space exploration and satellite technology, health care, biotechnology, education were also singled out as areas of mutual cooperation.

The head of Russian minerals and metals conglomerate, Renova, signed agreements for a manganese mine in the Kalahari desert with a potential annual output of 1.5 to 2 million tones of manganese ore per year.

Viktor Vekselberg said that the company planned to invest $1bn over the next five years in the mine and associated infrastructure and was also considering building a new ferroalloy smelter.

Vekselberg, reportedly one of Russia's richest men, said that his company hoped to use South Africa as a springboard to other African markets.

The heads of South Africa's De Beers and Russia's Alrosa - the biggest and second biggest diamond producers in the world -signed an agreement paving the way for joint diamond prospecting and exploration activities in Russia and potentially other regions of the world, including Africa.

De Beers chief Nicky Oppenheimer - who had a private meeting with Putin on Tuesday night - said that the cooperation agreement would extend the 50-year relationship.

De Beers and Alrosa were the subject of an antitrust probe by the European Union into a 2001 deal whereby De Beers said it would buy diamonds worth $800m from Alrosa every year for five years.

South African bank Nedbank also signed an agreement with Nvesheconombank to facilitate trade, finance and funding opportunities between Russian and South African companies.

Patrice Motsepe, one of South Africa's top business leaders, said the political impulse provided by the two presidents would reap big dividends.

"You are igniting the fire which has always been there and which is probably going to deliver huge, huge results," he said. "The potential is huge, huge."

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