Zimbabwe’s sovereign wealth vehicle, the Mutapa Investment Fund (MIF), has stepped forward to clarify growing speculation surrounding the US$1.9 billion worth of Treasury Bonds used to acquire a 35% stake in Kuvimba Mining House (KMH), stating that the transaction is not a cash outlay but a structured, long-term investment aligned with government growth strategies, particularly in gold mining.
By Rudairo Mapuranga
The Fund, which oversees Zimbabwe’s largest state assets and investments, issued a statement this week to counter misinformation circulating on social media and various informal platforms, noting that the purchase was done through government-issued 10-year Treasury Bonds with a three-year grace period, rather than immediate cash payments. This strategic acquisition, according to MIF, was not only fiscally structured but also valuation-backed, anchoring the future of KMH as a wholly government-owned entity.
Following the deal, the government now owns 100% of Kuvimba, with the shareholding distributed as follows: Mutapa Fund (63%), Datvest Nominees for former farmers’ compensation (12.5%), the Insurance and Pensions Commission (5%), National Venture Company representing war veterans (2.5%), women (2.5%), youth (2.5%), Deposit Protection Corporation (5%), and the Public Service Commission (7%).
Kuvimba’s Gold Ambitions Drive Government Strategy
At the heart of this investment is gold, a mineral that remains central to Zimbabwe’s economic ambitions. According to MIF, the decision to use US$1.9 billion in Treasury Bonds was based on a valuation of KMH conducted by two independent advisory firms, placing KMH’s worth at US$3.2 billion as of October 2023. This valuation was driven largely by increased gold, platinum, and lithium prospects, particularly at Sadawana Mines.
Mutapa believes the TB-backed acquisition will pay off through mineral ramp-up, especially in gold, where current international prices are strong. KMH’s gold-producing units, such as Freda Rebecca, Shamva, and Jena Mines, continue to show impressive growth. For instance, KMH is projected to produce 3,642 kilograms of gold in FY2025, a 12.2% increase from the previous year. Shamva alone is on track to deliver over 730 kg, while Freda Rebecca continues to contribute over 68% of total output.
The Fund is optimistic that, through mineral ramp-up strategies and joint ventures, it can settle the US$1.9 billion loan ahead of maturity, with share buybacks and other equity-anchored financial engineering used to reduce fiscal risk.
A $16 Billion Portfolio Under Scrutiny
As of the last official assessment, the Mutapa Investment Fund’s entire portfolio has been valued at US$16 billion, including assets in mining, energy, agriculture, and infrastructure. Despite this, the Fund has faced criticism from watchdogs and sections of the public over transparency, control, and the concentration of national wealth in a single sovereign vehicle.
A report by The Sentry, a U.S.-based watchdog, earlier warned that Zimbabwe’s sovereign wealth fund could be vulnerable to misuse without sufficient transparency and legislative oversight. This follows concerns about how proceeds from top state-owned companies, like KMH, are distributed and whether all Zimbabweans are benefiting from their mineral wealth.
Responding to the criticism, MIF highlighted that it has already received US$2.2 million in dividends from the National Oil Infrastructure Company of Zimbabwe (NOIC) and intends to intensify its dividend performance across sectors.
Gold as a Hedge for Fiscal Strategy
MIF Chief Executive John Mangudya reiterated that the Fund intends to settle the TBs within the grace period by leveraging gold’s strong international price, which reached over US$2,300/oz in early 2025 and is now over US$3,000/oz. The goal is to use KMH’s growing output—particularly in gold—as the primary vehicle to meet these obligations without compromising the Treasury’s liquidity or increasing fiscal exposure.
In the meantime, the Fund will pursue public-private partnerships, mine expansions, and additional capital inflows to support this strategy. With the future of Zimbabwe’s economic stability closely tied to mining and resource-based revenues, the KMH deal is being framed as both a fiscal asset and a symbol of state-directed industrialisation.
A Roadmap for Sovereign Investment
While critics remain cautious, the Fund argues that the US$1.9 billion deal is a bet on Zimbabwe’s mineral future—especially gold—and a necessary step in asserting sovereign ownership over its key national resources. Whether that bet pays off will depend on KMH’s production performance, international gold prices, and the Fund’s capacity to maintain transparency and efficiency.
In the coming months, all eyes will be on how KMH’s operations expand, how Mutapa leverages its investment structures, and how the broader economy benefits from this consolidation of state-owned mining power. As Zimbabwe aims to achieve an upper-middle-income economy by 2030, the Mutapa-KMH gold-driven strategy may prove either a masterstroke or a cautionary tale in resource nationalism.
