Zimbabwe seeks $950 million in new bid to kick-start mining firm

Credit: Sandawana Mines via LinkedIn

Zimbabwe’s state miner is planning a fresh bid to kick-start a range of projects a year after the government took full control of the company.

Kuvimba Mining House Ltd., under new chief executive officer Trevor Barnard, is looking to development banks, mining companies and traders to raise $950 million to develop lithium, platinum and gold assets, he said in an interview.

“Access to all the large development banks, to all the funding, to all the major traders has just opened up,” said Barnard, without identifying the potential financiers. The change in the ownership structure has “been really a very good move for Kuvimba.”

Previous attempts to raise funding were hindered because of speculation over the undisclosed identity of private investors who held about a third of the company. Earlier attempts to hold an initial public offering and form a venture with Russian investors were abandoned.

Kuvimba’s main assets were formerly held by companies tied to Kudakwashe Tagwirei, a politically connected businessman, Bloomberg reported in 2021.

Tagwirei, a one-time adviser to Zimbabwe’s President Emmerson Mnangagwa, has been sanctioned for alleged corruption by the US and the UK. Kuvimba has always denied that he ever held a stake in the company.

The government has discussed handing some of Kuvimba’s output to Trafigura Group to repay an outstanding fuel debt, Bloomberg reported in 2022.

More than half of the amount the company plans to raise will go toward a building an underground platinum mine at the long-delayed Darwendale project, according to Barnard, who took up his post in December. A lithium project the company estimates will cost as much as $275 million may be quicker to develop, he said.

The company has agreed a lithium joint venture with Chinese mining firms, and will finalize the deal by March before proceeding to build the first phase of the project known as Sandawana.

It will take about 15 months after signing to start production that will ultimately reach 500,000 tons of lithium concentrate per annum, Barnard said. The Chinese partners will finance the project and transfer it back to Kuvimba once the loan is repaid, a process he estimated would take less than five years.

Kuvimba also plans to develop a second area at Sandawana. Barnard said the company has already received interest from potential investors, including Cluff Africa Ltd. and a major European commodity trader that he declined to name. Other Chinese investors are also keen, he said, adding Kuvimba may sign a deal within six to 12 months.

Cluff didn’t immediately respond to an emailed request for comment.

At the Darwendale platinum deposit, the company initially plans to develop a smaller open-pit mine this year that will cost about $50 million to dig. It will pay another mining company to process that ore, according to Barnard.

Kuvimba is in talks with development banks for loans to finance the bigger, underground project and processing facilities, he said, without giving more detail. The targeted start date is within three years.

Zimbabwe holds the world’s second-biggest platinum reserves after South Africa and is Africa’s biggest lithium producer.

Kuvimba is now 70%-owned by the state sovereign wealth fund known as Mutapa Investment Fund, with entities held by the finance ministry, including state pension funds, power utilities and a deposit insurance fund, holding the rest, Barnard said.

(By Matthew Hill)