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Zimbabwe takes full control of controversial state miner Kuvimba

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Bloomberg


Zimbabwe’s state sovereign wealth fund has now acquired all of state mining company Kuvimba Mining House Ltd, in a bid to end speculation about its ownership.

Kuvimba holds some of Zimbabwe’s best mining assets, which were once owned by a company controlled by US- and UK-sanctioned tycoon Kudakwashe Tagwirei, an adviser to Zimbabwe’s President Emmerson Mnangagwa. The government has never given details of how they came to fall under its control other than to say they were acquired for an undisclosed amount.

Kuvimba was in 2021 said by the government to be 65% state-owned with the remaining 35% being held by private investors that were later described as a management consortium. Mutapa Investment Fund, the sovereign wealth fund, initially took over the 65% held by the government and has now bought the rest, said Simba Chinyemba, Kuvimba’s chief executive officer.

Unhelpful speculation

“The speculation was unhelpful and the fact that the speculation did not die out despite us presenting the evidence of the structure of Kuvimba” complicated its dealings, Chinyemba said in an interview in Cape Town on Thursday. “If there are questions about your shareholding then potential investors would want to think a little bit deeper about investing.”

Chinyemba said he was one of the beneficiaries of the buyout and that Tagwirei had never owned any of the company or profited from its operations, which include nickel and gold mines and lithium and platinum deposits. He wouldn’t disclose the amount paid for the 35% or when the transaction was completed, but said it was “very fresh.”

In 2021 Bloomberg reported on a trove of emails, documents and WhatsApp messages that delineated the links between Tagwirei and Sotic International Ltd., the company which held the assets taken over by Kuvimba. The Financial Times and The Sentry followed with reports giving additional details of the relationship later that year.

Tagwirei – who the US government sanctioned in 2020 for allegedly using his political relationships to gain state contracts and secure privileged access to hard currency – is “not involved in the running of the business,” Chinyemba said. “He’s not a shareholder in the business. We don’t pay any royalties to him.”

Kuvimba said three years ago it planned to hold an initial public offering. Its assets include Darwendale, Zimbabwe’s biggest platinum deposit, which was previously partly owned by Russian investors.

Tagwirei, known in Zimbabwe as “Queen Bee” because of his political and economic influence, was also sanctioned by the UK in 2021.

Future plans

Kuvimba is currently working to raise almost $900 million for the construction of platinum and lithium mines on deposits within the company’s portfolio as well as the expansion of one of its operating gold mines, according to Chinyemba. The firm would prefer to raise debt for the platinum and gold projects and form a joint venture for the lithium investment, he said.

While the prices of lithium and platinum-group metals have fallen sharply in the last year, the Kuvimba boss said it’s a good time to be pushing forward with new mines because the company believes in the minerals’ long-term outlooks.

“We don’t want to find ourselves trying to start production or trying to build plants when prices are high,” Chinyemba said. “If the funding is available now, we would happily go for it.”