Kuvimba: A reflection of policy magic
The Government policy is vital insofar as it permeates every aspect of daily life, therefore, how successfully policies are implemented is essential to the success of the economy.
Over the past week, Kuvimba Mining House announced a US$5,2 million dividend, which effectively met the Government’s obligations in respect of a number of key policy areas, namely: compensation for improvements under the Global Compensation Agreement, funded the National Venture Fund, compensated pensioners in respect of legacy pensions, compensated small depositors for loss of value on savings, contributed to the Sovereign Wealth Fund of Zimbabwe and added to the Government coffers . . . all in one go.
For instance, through the dividend payout, the Zimbabwe Women MicroFinance Bank has received additional funding to the tune of US$200 000.
Said the Minister of Woman Affairs, Community, Small and Medium Enterprises Sithembiso Nyoni: “I’d like to express my sincere appreciation to Kuvimba Mining House for coming up with additional capital (for the Zimbabwe Women Microfinance Bank) after the Ministry of Finance and Economic Development released some money to the financial institution earlier this year.
“This demonstrates the importance you put to empowerment and it complements the work we are doing with women.”
Insurance and Pensions Commission (IPEC) Commissioner Dr Grace Muradzikwa was pleasantly surprised by the dividend payment to the regulator in respect of compensation to pensioners for value losses.
“We thank the Government for acknowledging that the 2019 currency reforms had unintended consequences on pensioners within the private occupational pension scheme. It is to the extent of this recognition that Government, through the 2021 National Budget Statement, set aside resources then equivalent to US$75 million to be applied to the compensation of pensioners for the loss of value,” she said.
“When the National Budget Statement was announced our initial thinking was that the resources earmarked for compensating pensioners were going to be a once-off allocation, but after further engagements with Government we were advised that the resources were in the form of shares in what they called a good asset.
“(The dividend payment) event makes us appreciate Government’s wisdom in allocating shares for the purpose of cushioning pensioners, since they are backed by real assets, which will benefit our pensioners for the foreseeable future on a sustained basis.”
Said Commercial Farmers Union Andrew Pascoe: “I would like to congratulate the management and staff of Kuvimba Mining for this achievement. Considering the levels of production and the state of many of the entities that make up Kuvimba Mining only a year ago when the operations began to being able to increase production and maintain costs to the extent of issuing a dividend of this magnitude a year later is remarkable.”
Besides, showing efficacy in reviving the fortunes of struggling mining assets, Kuvimba is working well as a tool for the implementation of the Government policies across various respects.
This particularly relates to how Kuvimba was structured as an entity, as outlined by Finance and Economic Development Minister Professor Mthuli Ncube.
“12,5 percent which is for the purpose of meeting obligations in respect of compensation for improvements under the Global Compensation Agreement signed between Government and former farmers. This shareholding, together with the capital uplift from the shares as well as dividend flows are a tangible financial commitment to the compensation process, in addition to the resources that are already being availed via the National Budget.
“7,5 percent of the equity in Kuvimba is held by the National Venture Fund which is managed by the National Venture Capital Company of Zimbabwe.
Of this, 2.5 percent is held on behalf of youths whose projects will be supported under the Fund; 2,5 percent for supporting women’s projects and 2,5 percent is held for the account of Veterans of the Liberation Struggle,” said Professor Ncube.
“Five percent shareholding is held by the Insurance and Pensions Commission and proceeds thereof are earmarked for compensation in respect of legacy pensions. The Government recognises that those pension funds which were eroded by devaluation when the economy adopted the multi-currency system in 2009 need to be compensated for exchange rate induced loss of value as recommended by the Justice Smith Commission Report.
“In similar vein, the Deposit Protection Corporation holds 5 percent shareholding in the company. The DPC is working on a framework towards some compensation for small depositors for loss of value on savings. Seven percent of shares in Kuvimba are held by the Public Service Pension Management Fund.
“6,5 percent shareholding is held by the Sovereign Wealth Fund of Zimbabwe, a statutory fund which is now being fully implemented for the future benefit of the Zimbabwean citizenry.
“The Government holds 21,5 percent equity in Kuvimba. The remaining 35 percent is held by the private sector investors which includes management.”
This strategic shareholding means the success of the mining entity works to meet the Government’s obligations in a number of key areas that contribute to the broader Vision 2030. It has contributed to one of Vision 2030’s major objectives of job creation, as the entity employs just under 4 000 workers.
However, beyond meeting these interests, Kuvimba is doing well with regards to its short-term targets of reviving struggling mining assets.
Kuvimba’s portfolio include 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). But, as management says, the most exciting prospect lies within Shamva Gold Mine.
The operations at Shamva had stopped in January 2019 when the bulk of the employees were retrenched. Operations at Shamva have since resumed and the mine now employs just under 900 employees and recently, a detailed exploration programme to delineate the resource at Shamva hill was concluded.
“The plan is to exploit this resource via a mega open-pit mine with the pre-feasibility study which was conducted indicating a viable large-scale long-life mine. Once fully developed, Shamva has the potential to become the largest gold mine in Zimbabwe by output and will target an annual production of 3 500kg of gold per annum,” said management.
Kuvimba is playing its role in ensuring that the Government’s vision of a US$12 billion-mining economy is attained.