Zimbabwe to Fund Compensation for White Farmers with Mine Revenue
To help settle a $3.5 billion compensation claim from white farmers and settle a two-decade dispute that soured the country’s relations with Western nations and global lenders, Zimbabwe plans to use profits from a mining venture.
Kuvimba Mining House Ltd., 65 percent of which is owned by the government, plans to raise $1 billion for acquisitions and capital spending. According to Chief Operating Officer David Brown, it will invest a “significant amount” of the cash raised on the Darwendale platinum project belonging to Kuvimba’s Great Dyke Investments unit.
If successful, in a failed land reform program that has seen Zimbabwe’s economy collapse, the company could help meet the $3.5 billion agreed by the government to pay thousands of white farmers it began evicting from their land in 2000. Dispute resolution is key to repairing relations with multilateral lenders who have closed off the country’s financing, reports Bloomberg.
Mthuli Ncube, the country’s finance minister, said in an interview that Kuvimba’s proceeds will be used to compensate the former White commercial farmers who lost their farms in 2000.
To meet the compensation bill, Zimbabwe is also considering selling real estate and raising debt and has appointed three advisory firms to assist it, Ncube said.
Platinum, which has the third-largest reserves in the world in Zimbabwe, is seen as a key to reviving the economy, and the country is encouraging investors from as far away as Russia, Cyprus, and Nigeria to try to develop new mines. Great Dyke is partly owned by investors from Russia.
According to Bloomberg, Kuvimba means confidence in the language of the Shona, Zimbabwe’s largest ethnic group.
Over the next 12 months, about $100 million of Kuvimba’s cash will be spent on acquisitions and capital spending, Brown said in an emailed response to questions.
“We require about $1 billion to build out mines and ensure that catch-up capital is made,” he said, referring to about three years during which little investment in the assets was made.
The group, whose portfolio includes assets of gold, nickel, and platinum, will raise part of the money through its operations internally, he said. It will be selling debt as well.
In a separate interview, Finance Minister Mthuli Ncube said Kuvimba is held by government pension funds and Zimbabwe’s sovereign wealth fund. In addition to compensating white farmers, Kuvimba’s earnings will be used for delayed pension payments, Ncube said.
Kuvimba has three working gold mines producing approximately 10,600 ounces of metal every month and owns a 550-ton monthly nickel mine.
The company is negotiating to purchase the Mazowe mine from Metallon Gold Zimbabwe Ltd.. Brown said it is exploring other metals such as lithium, nickel, and copper and exploring possibilities elsewhere in Africa.