Kuvimba pays US$5m dividend, turns around struggling mines
KUVIMBA Mining House has turned around the fortunes of several struggling mining assets around the country and within its first year of operations paid a hefty US$5,2 million dividend to stakeholders.
The group took over the ownership and management of several mining assets in Zimbabwe during the second half of 2020, and has seen the performance of the underlying mining assets improve significantly.
Eighteen months ago, Shamva Gold Mine, Homestake and Zimbabwe Alloys were all under judicial management with uncertainty hovering over the heads of employees and communities that also benefitted from the operations of the companies.
To the extent of this improvement, the group yesterday shared a US$5,2 million dividend to seven key shareholders at a ceremony held in Harare.
The money was distributed as follows: Sovereign Wealth Fund of Zimbabwe (US$520 000), Public Service Pension Management Fund (US$560 000), Deposit Protection Corporation (US$400 000), Insurance and Pensions Commission (US$400 000), Datvest Nominees (US$1 million), National Venture Capital Company of Zimbabwe (Pvt) Ltd (US$600 000) and Government (US$1,72 million).
According to management, the dividend is based on unaudited figures, “but the board felt that given the underlying performance of its subsidiary companies the dividend was appropriate.”
“The investment in Kuvimba is also in line with Government’s aim of driving robust and rapid economic growth and the transformative thrust of moving the economy up the value chains.
“During the National Development Strategy 1 (NDS1) period, Government priorities have been placed on developing and strengthening already existing value chains, decentralisation of industrialisation initiatives and provision of a consistent, stable policy environment for the mining sector,” said Finance and Economic Development Minister Professor Mthuli Ncube who was the guest of honour.
“In this regard, Government has taken the opportunity to partner with willing and able private sector players who believe in the National Vision and are desirous to participate in the economic prosperity of the people of Zimbabwe.
“In the same vein, Government is also demonstrating to all existing and potential partners that Zimbabwe is capable of meeting its domestic financial obligations.”
The majority shareholding in Kuvimba Mining House is held by a broad spectrum of local institutions, including a 12,5 percent, which is for the purpose of meeting obligations in respect of compensation for white former commercial farmers for improvements under the Global Compensation Agreement signed between Government and former farmers, a 7,5 percent stake 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.
About five percent shareholding is held by the Insurance and Pensions Commission and proceeds thereof are earmarked for compensation in respect of legacy pensions. The Deposit Protection Corporation holds five percent shareholding in the company. The DPC is working on a framework towards some compensation for small depositors for loss of value on savings.
Also, seven percent of shares in Kuvimba are held by the Public Service Pension Management Fund, while 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, and the balance of 35 percent is held by the private sector investors, which includes management. Shareholders are pleased with the outcomes of the mining entity.
Insurance and Pensions Commission commissioner Dr Grace Muradzikwa, said the model worked to cushion pensioners in the long-run.
“Today’s 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 Dr Muradzikwa.
Earlier in May, Kuvimba’s Freda Rebecca broke a 20-year production record by producing 300kg of gold.
Said DPC chief executive Mr Vusi Vuma: “The distribution of the dividend in the first year gives us confidence in its (Kuvimba)’s future”.
Kuvimba owns and manages three operating gold mines, three non-operating gold mines, various chrome operations, an operating nickel mine as well as an investment in a platinum project.
“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,” said Commercial Farmers Union’s Mr Andrew Pascoe whose organisation has 12,5 percent in the mining giant.
The company strategy has followed an initial phase of stabilising the operations, secondary phase of increasing metal output from current operations and the third phase is to operationalise the current non-operating asset.
Phase one has largely been completed and this was achieved through the reinvestment of capital in the operations, management re-organisation.