KUVIMBA Mining House (KMH) is the new household name. A magical name that will solve the land question, improve mining output and the pensions dilemma. However, its creation and ownership remain murky and offer a glimpse of an emerging oligarchy in Zimbabwe.
KMH introduced itself to the Zimbabwean public last week when it announced payment of US$5,2 million dividend to “shareholders”. There was pomp and fanfare as the big CBZ Bank dummy cheques exchanged hands.
Finance and Economic Development minister Mthuli Ncube was the guest of honour and explained what KMH was in his main speech. This is a motley of shareholders and many of them received the shares gratis.
Shareholding equivalent to 20% is in the hands of unclear shareholders. Of the 20%, 12,5% is for the purpose of meeting obligations in respect of compensation for white former commercial farmers under the Global Compensation Agreement signed between Government and former farmers. The remaining 7,5% is controlled by National Venture Capital Company of Zimbabwe. There are purported three beneficiaries of that stake in equal 2,5% quotas – youths, women and veterans of the liberation struggle.
Who represents that one fifth of the shareholding on the board? Not very clear at the moment, suffice to say these are controlled through the Finance ministry (Ncube or his proxies). It is not clear how a debt (Global Compensation Agreement) is a shareholder. What happens if the debt is liquidated in say, 20 years at the rate of the dividends are being paid?
During the dividend payment function, the following government departments received money as shareholders: Sovereign Wealth Fund of Zimbabwe (6%), Public Service Pension Management Fund (7%), Deposit Protection Corporation (5%), Insurance and Pensions Commission (5%), Datvest Nominees, and National Venture Capital Company of Zimbabwe (7,5%).
The Government of Zimbabwe owns 21,5% of KMH. If these is added to the other shareholders (government departments) the government controls a tidy 64,5% of the mining house.
The big question is who owns the 35,5% that are in private hands? And this small clique of shareholders is in control of the management of the company.
One cannot speculate who controls this 35,5% of such a strategic asset. The first port of call is to look at the assets that form the mining house. Kuvimba, in its portfolio controls the following mines – Freda Rebecca Gold Mine, Bindura Nickel Corporation, Shamva Gold Mine, Jena Mine, Elvington Mine, Sandawana, Homestake, Zim Alloys, and an investment in Great Dyke Investments (GDI),
Freda Rebecca, BNC, Shamva and GDI are owned or controlled by one individual – Kudakwashe Tagwireyi. The same Tagwireyi who is a member of the Presidential Advisory Committee. He is the same man who was beside President Emmerson Mnangagwa when he was signing the deal to bring Zupco busses in Belarus.
All in all, KMH owns and manages three operating gold mines, three non-operating gold mines, various chrome operations, a prime nickel mine as well as an investment in potentially Zimbabwe’s largest platinum project, according Ncube.
An interesting picture starts emerging when one puts the spotlight Tagwireyi. He is a man who has a finger in every pie. Tagwireyi is a big player in the petroleum industry through Sakunda and with a significant shareholding of the Beira-Mutare-Harare oil pipeline.
Sakunda is also a big stakeholder in the agriculture sector through its funding of Command Agriculture. It has funded the military-controlled programme since 2016 and pumped in well over US$5 billion. Many of the transactions were done off the books and the Auditor General Mildred Chiri flagged them in her 2018 report, noting that Treasury used unallocated reserves to fund agriculture against laid down law that requires money to be apportioned first.
It is important to note that Freda Rebecca was last year given a gold buying licence. It buys gold from artisanal miners and further resale to Fidelity Printers and Refiners, a subsidiary of the central bank. Freda Rebecca is working in partnership with CBZ Bank in purchase of gold. It uses the banks’ offices as buying and paying points.
Freda Rebecca Gold Mine general manager, Eliakem Hove confirmed at the time that CBZ’s branches will be used as gold collection and cash payment centres and the gold will ultimately be sold to the RBZ subsidiary, the Fidelity Printers and Refiners (FPR).
The relationship between Fredda Rebecca and CBZ is more than client and banker relationship. Tagwireyi is a significant shareholder in CBZ Bank. And for good measure it is the same bank that is now processing Command Agriculture loans, the same loans that are guaranteed by the State.
It should be further noted that Sakunda Holdings is also the beneficial owner of St Annes Hospital and the Norfolk Hospital. These two were bought and their licensing fast-tracked because of Covid-19 pandemic. The company also got a license to import personal protective equipment and other related medical accessories during the pandemic.
This web of inter-related companies show how much Tagwireyi has become a crucial cog in both Zimbabwe’s politics and the economy. The appropriate term to describe the situation is: oligarchy. Oligarchy is a noun that refers to – a small group of people having control of a country or organisation.
At this point, Tagwireyi, telecoms mogul Strive Masiyiwa and Axia’s John Koumides and Zed Koudounaris are in the small elite of people Zimbabwe have to deal with on a daily basis, whether we choose or not. They control among them all the things that we many need to get through each day.
KMH gave us a window to what the building of an oligarchy is like and the trend under the “new dispensation” will be like. Many of these men will be consolidating their investments and power in the near future, thanks to the neoliberal, capital worshipping political elites.
Zimbabwe now has a crown prince.