Zimbabwe’s government controls 65% of Kuvimba through a 21.5% direct stake and other shareholdings via state entities, including a sovereign wealth fund

By Bloomberg

Zimbabwe made its first compensation payment as part of an agreement to settle a dispute with White commercial farmers who had their land seized violently two decades ago.

The state-linked Kuvimba Mining House transferred $1 million to the farmers as the government asked for a delay in paying the full $3.5 billion compensation it had agreed to a year ago.

While the payment is a fraction of that agreed to, resolving the dispute is key to the country pulling out of the economic stagnation that the seizures, ordered by then-President Robert Mugabe triggered.

Exports plunged, relations with multilateral lenders were severed, the US and the European Union imposed sanctions and Zimbabwe experienced a bout of hyperinflation.

“Government asked that the payments be spread out,” Andrew Pascoe, president of the Commercial Farmers’ Union of Zimbabwe, said in an interview in the capital, Harare, this week.

“This represents the first money we have received.”

 

 

The farmers were originally to be paid half of the damages agreed to by next month, but the government requested that be put off for 12 months, Pascoe said.

Zimbabwe’s government controls 65% of Kuvimba through a 21.5% direct stake and other shareholdings via state entities, including a sovereign wealth fund, pension funds and a special purpose vehicle created for farmers whose land was seized, Finance Minister Mthuli Ncube said this week.

However, there have been contradictory claims about the ownership of Kuvimba’s assets.

The payment was part of $5.2 million given to shareholders.

Under the agreement with farmers, the government proposed selling a 30-year bond on global markets to raise the money, but this has been delayed because of the effect of the coronavirus pandemic.

The state’s decision to make farmers shareholders in Kuvimba and to give others 99-year leases signaled a commitment to settle its obligations, Pascoe said.

 

 

Meanwhile David Brown, chief executive officer of Zimbabwe’s Kuvimba Mining House, intends to step down, jeopardizing the future of the company the government hopes will spur an economic revival.

The 58-year-old South African mining veteran has told Kuvimba stakeholders he aims to step away from executive positions, two people familiar with the situation said. Brown wouldn’t comment on talks regarding his post at Kuvimba when called by Bloomberg.

“It has always been my intention to transition from executive roles to non-executive roles,” Brown said in a separate emailed response to queries. “When I joined it was always understood that this was the process I wanted to follow.”

Kuvimba says it aims to build one of the world’s biggest platinum mines and revive a number of neglected gold and operations, projects that are key to boosting the nation’s export earnings.

Zimbabwe’s finance minister, Mthuli Ncube, in January said Brown was appointed to head the company because of his international experience and track record.

Appointing his replacement will highlight questions of control and ownership.

The government says that together with state-controlled entities it holds 65% of Kuvimba, which also has nickel and chrome operations.

But documents, emails and WhatsApp messages seen and reported on by reporters on May 11 show how, through a complex series of transactions, the assets that form the core of its holdings were until recently owned by or tied to Kudakwashe Tagwirei, a politically connected businessman and presidential adviser who was sanctioned for corruption by the US last year.

Almas Global Opportunity Fund SPC, an investment firm registered in the Cayman Islands, said it still owned the mining assets months after Ncube said they formed part of Kuvimba.

David Brown

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