Denel, Saudis in arms talks while EU seethes over Khashoggi

At the same time as calls have been made to the European Union to halt arms sales to Saudi Arabia following the killing of journalist Jamal Khashoggi, the Saudis are understood to still be pursuing a possible investment in South African arms maker Denel.

South Africa and the Saudis have been involved in arms negotiations in various areas since the end of apartheid in 1994.

In 1997, a deal for the desert kingdom to buy G5 and G6 towed and self-propelled 155mm artillery pieces –said to be worth then as much as US$10 billion (R147bn) – was cancelled by the Saudis after details leaked out in a Johannesburg newspaper.

South African arms sellers have also been active for many years in the Middle East, hawking technology ranging from drones to missiles and even the complete Rooivalk attack helicopter system. None of those big deals were ever concluded but it is understood that the Saudis and others in the area have bought South African small-arms ammunition.

Yesterday, Austrian Foreign Minister Karin Kneissl told a German newspaper that an arms boycott of the Saudis could also help end “the terrible war in Yemen”.

The comments from Austria, current president of the EU, came after Germany said it would stop approving weapons exports to Saudi Arabia until Khashoggi’s death at the Saudi consulate in Istanbul is cleared up.

Chancellor Angela Merkel’s government is also discussing how to deal with sales already approved.

Referring to the wider EU, Kneissl told Die Welt newspaper: “The halt in arms deliveries proposed by Chancellor Merkel would be a correct signal.”

Austria had already stopped sending military equipment to Saudi Arabia in March 2015, she added. France and Britain (which will leave the EU in March) are major arms suppliers to Riyadh.

French President Emmanuel Macron told King Salman on Wednesday that France, in coordination with partners, could take action against those held responsible for the murder.

However, since coming to power last year Macron has largely ignored protests over arms sales he deems vital to jobs and France’s strategic relationships in the region. French arms deals with Riyadh totalled 1.5 billion euros ($1.7 billion) last year.

The European Parliament adopted a resolution on Thursday calling on member states to impose an EU-wide arms embargo on Saudi Arabia.

Merkel spoke to the king on Thursday, condemning the killing and saying Germany was ready to take “appropriate measures” along with international partners, her chancellery said.

Kneissl said the war in Yemen and a crisis in relations between Qatar and Saudi Arabia and its Arab allies should prompt joint EU action.

“If we as the entire EU stop weapons deliveries to Saudi Arabia, that could help end these conflicts,” she told the newspaper.

A Saudi-led coalition that intervened in Yemen’s war in 2015 has conducted frequent air strikes targeting the Iran-aligned Houthi group, and has often hit civilians, although it denies doing so intentionally. The war has already killed more than 10 000 people, displaced more than 2 million and driven Yemen to the verge of widespread famine.

This week, African Defence Review (ADR) reported that during President Cyril Ramaphosa’s visit to Saudi Arabia in July both countries had discussed the possibility of a $10 billion Saudi investment programme in South Africa.

Last month, senior representative of Saudi Arabian Military Industries (Sami) were in South Africa to discuss the possibililty of taking up a state in Denel.

ADR spoke to Dr Andreas Schwer, CEO of Sami, on the sidelines of last month’s Africa Aerospace & Defence exhibition in Tshwane, about his company’s proposals. In the interview Schwer stated that Sami was interested in partnering with companies that could provide missile, ammunition, and optoelectronic technology.

In terms of Denel, Schwer said that Sami was seeking both an equity stake in the holding company, Denel SOC, as well as stakes in one or more of its subsidiaries, but he said that his company had been approaching all South African defence companies, including Paramount Group, about possible partnerships.

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