ZW VIEW | Kuvimba: Drop the act and just come out and say it

Mines Minister Winston Chitando at Kuvimba dividend payout ceremony, June

On Tuesday, Kuvimba Mining House came out to declare: “We have nothing to do with Kuda Tagwirei.” Nobody is buying that, and Kuvimba and the government shouldn’t even be trying to sell us that line.

Since Kuvimba first emerged last year, the firm and the government have worked overtime to put a gap between the company and Tagwirei. They really shouldn’t have tried that, given all the breadcrumbs of common directorships tracing back to the businessman.

A stash of emails leaked by Christopher Fourie, a former director, has detailed how Tagwirei ran point in the formation of the company.

“We are about to make one of the biggest companies in Southern Africa and here you are jostling and fighting,” one email from May 2019, said to be from Tagwirei to his bickering executives, said.

Yet, in their statement on Tuesday, Kuvimba insisted: “Kuvimba notes the contents and distances itself from the report and reiterates that Mr Tagwirei is neither a shareholder, nor is he involved in any activities of the business. In fact, we distance ourselves from Mr Tagwirei.”

The company says all the emails are from a time before ownership changes which, they claim, excluded Tagwirei.

The statement does nothing to clear the deliberate fog around how Kuvimba came to own companies bought by another company, Sotic International. That firm is still part-owned by Almas Global, an offshore private fund that has publicly stated that it helped engineer the acquisitions in Zimbabwe.

What Kuvimba and government should have done from the start is this; lay out in public the beneficial ownership of the company, and work to justify it as any administration with any degree of self-confidence would.

Was it a fear of sanctions? Those are inevitable. What’s new there?

At newZWire, we covered how government failed in its attempts to sell ZMDC mines. As targeted investors stayed away, mining executives said at the time that, inevitably, investment into the mines would have to be home-grown. They were right. This is what has happened. It is pointless to try and hide it.

TIMELINE | From a failed sale to Kuvimba takeover: all our coverage of ZMDC’s selloff

Bad money doing good?

Here, let’s state what may be unpopular facts; Kuvimba’s money has been good for the mines it has taken over, so far.

Shamva Mine, once owned by Metallon, was shut down in 2019. At one time, even its milling plant, the base of a mine’s processing chain, was put on auction to pay off creditors. Shamva resumed production in June last year, hauling 20 000 tonnes of ore per month. This has since doubled in less than a year of Kuvimba’s arrival there.

It’s a mine with some of the best potential; Shamva Hill has inferred and indicated resources to sustain a long-life mine of 3500kg per year. A new mine and processing plant is to be built in 2022 after a definitive feasibility study this year and fundraising. Some 890 workers there have their jobs back.

At Sabi, workers were owed US$3 million in salary arrears. They have been paid.

For Jena Mine, which has struggled for years, Kuvimba’s investment, which includes redeveloping ground resources and fixing processing capacity, will lift output from 30kg to 80kg a month over the next two years.

Freda Rebecca used to average between 1,500kg and 2,100kg of gold per year. Kuvimba has lifted output to 2,690kg. The mine hit record monthly production in May.

At Bindura Nickel Mine, a shaft-deepening project that is key to the future of the mine, started in 2003 but had long been abandoned for lack of money. Within a year, Kuvimba has completed the project.

ZimAlloys has emerged from judicial management after Kuvimba paid off creditors. The company is considering re-firing the Gweru furnaces.

So, yes, Kuvimba has done exceptionally well in putting these mines on the road to recovery. They and government have, however, done exceptionally badly in trying to hide how the company came into being.

This ducking and diving is needless, in our view. Who knows, with open debate, we may yet find that, beyond all the heavy breathing around the whole affair, there’s a reason why few have found the smoking gun to show that the web leading to the Kuvimba takeover is unusual for the industry.

That BNC, a listed entity, thinks it’s enough to merely state that a 73% stake bought in the company by Sotic was “transferred to Kuvimba Mining House” shows the level of contempt for its disclosure obligations.   

Zimbabweans deserve full disclosure on who is running the country’s mineral assets, how the deals were structured, and how they were funded. That’s all.

Dear Authorities, please drop the cowardice and just come out and say it: “Dear Zimbabweans, we decided to hand these mines to one of our own, and this is what he has so far done with them.”

Of course, many of us would be outraged. But, listen, we would rather rage at truth and facts, than rage at clumsy spin and speculation.