Mining ZimbabweLatest Mining News, Policy and Industry Updates

Zimbabwe is primed to draw significant benefits from its diverse mineral resources amid projections that, at 7 percent growth per annum, the sector will outpace growth for the rest of the economy over the next five years.

The Government has designated the sector as anchor for the country’s economic growth in the short to medium term, driven by largely production ramp up, new projects and anticipated global commodity price boom.

Already, mining generates approximately 65 percent of Zimbabwe’s annual exports, accounts for 12 percent of Gross Domestic Product (GDP) and employs hundreds of thousands directly and along value chains.

Officially opening the Chamber of Mines of Zimbabwe (CoMZ) annual conference in Victoria Falls, President Mnangagwa acknowledged the role of mining in driving Zimbabwe’s economic growth and development.

He directed Finance and Economic Development Minister Mthuli Ncube to support the sector.

And rightly so, Minister Ncube obliged, promising incentives to support ongoing production and investments into the capital intensive industry, which he admitted was key to leveraging economic growth.

The Treasury chief then revealed that he expected the mining sector to expand by at least 7 percent annually, faster than for the rest of the economy over the National Development Strategy (NDS1)’s five-year term.

“For the mining sector, we project growth of the order of 7 percent per annum, which is above the NDS1 growth target of 5,2 percent over the five year period,” the minister said.

He said Treasury had given incentives for the mining industry including lower corporate tax, deductibility of royalties
for income tax purposes, reduced from 15 to 10 percent royalties for players in diamond mining and a sliding scale royalty system for gold mining.

Mines and Mining Development Minister Winston Chitando last week reiterated his assertion that the country was on course to meeting its target of growing the mining sector to a US$12 billion industry by 2023.

He said achievement of the mining industry milestone was a key element of the building blocks for the attainment of the national vision of transforming Zimbabwe into a middle-income society by 2030.

Key minerals that will anchor growth of the mining include gold, platinum, chrome, diamond, nickel, coal and lithium. However, Zimbabwe is home to over 40 minerals types, which presents further opportunities for investors.

Minister Chitando said “day by day, month by month (mineral) production is increasing” among the productive sub-sectors of the mining industry, including platinum, gold, chrome, diamond, coal and lithium.

In the platinum sector, the minister is on record saying mining firms; Zimplats, Unki and Mimosa were currently expanding their operations while new projects, including Karo Resources, were at different stages of development.

While new investment flows into Greenfield and Brownfield gold projects, authorities say they are working on measures to plug leakages and increase deliveries to Fidelity Printers and Refiners, the country’s sole gold buyer.

In the coal and hydrocarbons sector, he said, there are thermal power projects at different stages of development. The sector is expected to contribute more than US$1 billion to the US$12 billion target.

Under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion, while chrome, iron, steel, diamonds and coal will contribute US$1 billion.

Lithium is expected to contribute US$500 million while other minerals will contribute at least US$1,5 billion.

Efforts are ongoing to ramp up chrome production while ferrochrome producing firms are increasing ouput.

Chinese-owned Afrochine Smelting has installed two more smelters at its plant in Selous, while Zimasco, one of the largest ferrochrome producers, has maintained its production capacity, the mines minister indicated.

In the diamond sector, the Zimbabwe Consolidated Diamond Company (ZCDC), a diamond mining company wholly owned by the Government, is looking to produce 3 million carats this year, Minister Chitando said.

Another diamond miner, Russian-owned Alrosa, is developing its diamond mining sites in Zimbabwe.

The minister reaffirmed the position that, considering the geology of Zimbabwe, some areas were best suited for mining by small-scale players, but there was significant room for participation of large-scale miners.

Minister Chitando said among other endowments, Zimbabwe had a unique resource in the form of a highly skilled human resource base, key in optimally exploiting the country’s mineral resources.

The Sunday Mail

The $12 billion mining sector by 2023 target might have sounded to some like a mirage or mere wishful thinking by an exuberant Government, but as days and months unfold, this is slowly becoming a reality, a goal quite achievable going by the situation on the ground or is it underground!

Although there is still much that the picks, shovels and their heavy-duty compatriots need to excavate, the progress made is noted.

The mining sector has become quite active, breaching its own output and employment targets in some instances while laid out production strategies by firms in the sector demonstrate a growing sector, exuding great potential. Mining has become a giant straddling across Zimbabwe’s economy.

One of the projects that have made headway is the Kuvimba Mining House, which has just declared a $5,2 billion dividend, triggering implementation of a number of empowering projects that had been put in abeyance by some of its shareholders.

Freda Rebecca, one of its gold mines, recently broke a 20-year record, producing 300kg gold in one month. The previously dormant mine was resuscitated only last year.

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 under the Global Compensation Agreement signed between the Government and former farmers, a 7,5 percent stake by the National Venture Fund, 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 while 2,5 percent is held for the account of Veterans of the Liberation Struggle).

The Insurance and Pensions Commission holds 5 percent and proceeds from the investment are set for compensation in respect of legacy pensions. Also, the Deposit Protection Corporation holds 5 percent shareholding and intends to expend some of the funds towards compensation for small depositors for loss of value on savings.

The Public Service Pension Management  holds 7 percent of shares in Kuvimba  while 6,5 percent shareholding is in the hands of the Sovereign Wealth Fund of Zimbabwe, a statutory fund which is now being fully implemented for the future benefit of the Zimbabwean citizenry.

Therefore, the results from this venture have made a huge impact to the said constituencies.

Kuvimba owns and manages three operating gold mines, three non-operating gold mines, chrome operations, an operating nickel mine and an investment in a platinum project.

“It is envisioned that this entity will help in unlocking the inherent richness and value of our country’s mineral deposits through deploying appropriate mining technologies and skills. I thus commend the company for showing confidence in our economy in response to our mantra, ‘Zimbabwe is open for Business,” said President Mnangagwa recently.

The Karo Resources project, a $4,2 billion venture, is expected to be one of the largest mining ventures to date in Zimbabwe as it will include platinum production, a PGMs refinery, 300MW power plant and coal mining operations. The project will lead to the creation of thousands of jobs.

The Tsingshan Holdings venture being financed by Chinese mining in Mvuma, has taken off on the back of President Mnangagwa’s “Zimbabwe is Open for Business”.

Tsingshan is one of the largest steel making giants globally, employing 80 000 people and has an annual output of 10 million tonnes of stainless steel with a turnover of $30 billion.

The group has already transformed the lives of many Chegutu youths through its subsidiary, Afrochine Smelting Plant located in Selous.

It is expected to contribute at least US$1,2 billion towards the US$12 billion mining industry by 2023.

Australian listed mining concern, Prospect Resources is another which recently took delivery of the pre-assembled pilot plant crushing equipment.

Arcadia represents a globally significant hard rock lithium resource. It is one of the most advanced lithium projects globally, with a definitive feasibility study, off take partners secured and a clear pathway to production.

Caledonia Mining Corporation, which has a major gold belt in Gwanda, has already made huge capital investments in both underground and surface mining, and rural infrastructure, in line with the devolution agenda. The firm is keen on investing in other Government-owned projects.

In the gold subsector, Dallaglio Investments (Pvt) Limited (in 2020), began a gold mining expansion drive at two of its gold mining assets — Pickstone Peerless Mine and Eureka Gold Mine. Pickstone Peerless, is currently producing about 65kg of gold per month and in terms of their expansion plans is expected to grow to about 100kg per month. At Eureka, which is currently under reconstruction, Dallaglio expects to haul two tonnes per annum of the yellow metal. Other massive projects are already in the cooking pot.

Mining contributes at least 12 percent to Zimbabwe’s Gross Domestic Product and more than 60 percent of exports. It employs thousands of people and impacts respective communities in a big way.

Many families depend on this sector for their livelihoods, either directly or through downstream industries.

The projects under implementation can only mean better lives for the communities and the nation at large.

The sector is expected to grow by 7 percent with reports that it will increase at levels above the GDP growth rate going forward.

Zimbabwe is blessed with at least 49 known minerals. This implies that we have barely scratched the surface. The potential is huge.

A major plus has been the country’s ability to attract interest from foreign investors into the capital-intensive sector in response to the “Zimbabwe is Open for Business” mantra.

Small mining firms have come to the party. We report in our business section that one of the gold buying agents Mr Pedzisayi Sakupwanya has delivered 1 400kg to Fidelity Printers and Refiners since the beginning of the year and promises to double the figure by the end of this year. The figure was an increase from last year’s 850kg.

Mines Minister Winston Chitando has stated that artisanal miners and National Gold Buyers Association are key in reaching a target of 100 tonnes per year by 2023.

However, the sector is still performing below capacity given available resources. Much more needs to be done to ensure the economy realises the sector’s full potential.

Mining is considered one of the best three areas to invest in, the other two being food security and education. In that regard too, we need to value add and beneficiate our minerals. Zimbabwe and the rest of the continent export minerals in their raw form, prejudicing the economies of billions of dollars annually.

Much more is being lost through smuggling, prompting the need for tighter supervision and the adoption of good corporate governance systems.

High volumes of minerals that are being clandestinely siphoned out of the country for the benefit of a few rogue individuals, at the expense of most who deserve nothing short of what they have been blessed with by the Almighty in terms of assets and resources.

Losing at least $1 billion a year from gold alone is no small issue. We need good corporate citizens that channel all output through formal channels to benefit the nation.

Zimbabwe is replete with some of the world’s best and most lucrative minerals in its belly: gold, diamonds, platinum, coal and all. It must, therefore, perform better, in terms of output regardless of the fact that our performance has been commendable in recent years.

I have always believed that we are one of, if not the most endowed of nations, on the planet, which probably explains the size of the fights that come our way.

But that notwithstanding, we need to put results on the table and attach value, rather extract value, real value from the assets that we have as a nation.

Parallel to agriculture, mining forms the backbone of our beloved economy and we can ill afford to hit anything less than 100 percent in terms of capacity utilisation in this sector.

With projections estimating a higher output in 2021, on the back of a better operating environment.

In a recent survey, 90 percent of respondents said they would up the ante in terms of mineral extraction and related activities as prospects within the sector for the year 2021 have been positive. No one player would want to be caught flat-footed when the tide hits.

Capacity utilisation is projected to grow to +/- 80 percent this year from 61 percent last year and everyone ought to come to the party as the Government, the single most important factor in this game, has intervened favourably for maximum results and output.

The extractive sector, along with other sectors of the economy, is expecting a major boost in 2021 and all is looking up with massive production expected in the mining sector.

Therefore, when the President says he envisages a $12 billion mining industry, he knows what he is talking about. He knows the potential, he knows the right policies that have to be in place.

Earning money from mining is one thing, making sure it has inclusive growth concepts,  quite another. It is an issue which preoccupies the Presidency.

May we not forget too, that minerals are a finite resource. We derive optimum national benefits while it lasts, as we look at other options with longevity, sponsored by what we would have earned.

In God I Trust!

Twitter handle: @VictoriaRuzvid2; Email: [email protected]; [email protected]; WhatsApp number: 0772 129 992.

Better Brands Jewellery (BBJ), a local gold-buying agent, has delivered 1,39 tonnes of gold to Fidelity Printers and Refiners (FPR) so far this year, which eclipses cumulative deliveries by the small-scale mining sector.

BBJ founder and chief executive officer Mr Pedzisai Sakupwanya said he hopes to double deliveries by year-end.

“Having delivered 1,39 tonnes of gold to FPR so far, I am pretty sure that we would have doubled that number by year-end or in the second half of 2021.

“It has been a proud moment and modest achievement for us, especially after delivering 850 kilogrammes last year,” said Mr Sakupwanya, who is also the interim chair of the recently formed National Gold Buyers Association of Zimbabwe (NGBAZ).

“As a company, we remain honoured by the Government’s empowerment programmes and challenged by President Mnangagwa’s mining sector targets, hence our singular efforts to continue making contributions to that US$12 billion
vision.”

Mines and Mining Development Minister Winston Chitando believes artisanal miners and NGBAZ are key in the Government’s target to increase the annual gold haul to 100 tonnes by 2023.

“I am pleased that (the organisation) has braced itself for this noble cause because leakages are threatening gold deliveries . . .,” Minister Chitando was quoted as saying in March.

While the country has been producing large quantities of the metal every year, deliveries to FPR have been low due to smuggling.

According to Mr Sakupwanya, NGBAZ’s thrust was to ensure the country gets the maximum possible benefit from its mineral resources.

“Our thrust is to ensure the country’s interests are protected in the trading of the yellow metal and our mandate is to… raise bullion deliveries through solid and recognisable structures (to) help with the monitoring and coordination of licensed players’ activities,” he said, adding:

“With the right policies and incentives, small-scale miners can only do better in a market where chaos and price distortions were eliminated.”

“Crucially, NGBAZ was a vote of confidence in President Mnangagwa’s policies . . . and a confirmation of our support for a self-regulated industry where indiscipline is not tolerated.”

The businessman — who was recently honoured by the Institute of Corporate Directors Zimbabwe (ICDZ) and Chartered Institute of Project Managers (CIPM) for being “one of the most influential mining-sector executives and helping nearly 5 000 artisanal miners” — cheered the partial privatisation of FPR.

Under the envisaged structure, the RBZ will retain 40 percent while the remainder will be disposed to small-scale and large-scale gold producers.

BBJ has always been one of FPR’s “top three suppliers”.

Mr Sakupwanya says the current rally in gold prices would help the country achieve its medium-term goals.

Gold remains the country’s largest foreign-currency earner.

It generated nearly US$1,3 billion in 2018 and accounted for more than 60 percent of the mining sector’s annual revenues.

Under the Government’s current plan to grow mining to a US$12 billion industry by 2023, gold is expected to contribute US$4 billion annually.

The Sunday Mail

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.

The Sunday Mail

Zimbabwe expects 100 megawatts of electricity to be added to the national grid from renewable energy projects by the end of this year, with an additional 50MW in thermal power, a government minister said on Tuesday.

“Cabinet advises that one thermal power project and ten renewable energy projects will come on board this year,” Information Minister Monica Mutsvangwa said, speaking at a post-Cabinet press briefing.

“The thermal power project will add 50MW to the national grid, while the renewable energy projects will provide about 100MW, translating to a combined total of about 150MW being realised from the projects,” Mutsvangwa said.

Zimbabwe is enduring load shedding, due in part to limited imports from Eskom South Africa. After itself going through bouts of rolling blackouts, South Africa has currently had a brief respite thanks to Koeberg nuclear power station generating power at full capacity. 

Due to ageing equipment, existing power plants are generating far below the national requirement.

With government-owned power utilities failing to provide adequate energy supplies, private companies have committed to invest in their own power plants.

It is hoped that the Independent Power Producers (IPPs), some of which are companies in different sectors of the economy, would produce electricity to meet their operational requirements while excess power would be fed into the national grid to reduce the deficit.

Companies go green

Zimplats, through its parent company Implats, is already conducting feasibility studies for the installation of a 200MW solar plant.

PPC Limited CEO Roland van Wijnen announced this week that its Zimbabwe unit is “looking to be an off-taker of solar electricity produced by IPPs“.

In November last year, Sun Exchange, a solar crowdfunding startup, started its African expansion in Zimbabwe by commissioning a US$1.4-million crowd sale of shares in a solar farm for fresh produce exporter Nhimbe Fresh.

A total of 1700 individual investors bought various portions of the 1.9MW plant.

Sun Exchange investors in the solar farm will earn a monthly income stream for 20 years, with an estimated internal rate of return (IRR) of 16.71% in South African rand terms, the firm said.

In the last couple of years, Zimbabwe has been stepping up incentives for solar power generation investors. According to Energy Minister Zhemu Soda, solar power generation investors can import solar equipment duty-free and can also enjoy five-year tax breaks.

Fin24

State-owned enterprises have a bad reputation in Zimbabwe, and often deservedly so, with even the best usually under-capitalised, having been unable to make enough profit for replacement of the museum pieces they use for machinery, and the worst with reputations of padded payrolls, executives who seem incapable of running a tuckshop let alone anything larger, and audit reports that outline wide-scale abuse of office or corruption.

Finance and Economic Development Minister Mthuli Ncube, who in the end has to deal with dubious CEOs hanging around the corridor outside his office clutching begging bowls, could be forgiven for feeling they are a lot more bother than they are worth.

But then this week he had a different experience, being guest of honour at the first dividend announcement of the newest, Kuvimba Mining House, where US$5,2 million was distributed with 65 percent of that going to entities and funds in the public sector, around US$3,4 million in revenue that is “off budget”. He looked rather happy and who could blame him since he had got it right.

His boss, President Mnangagwa, will be pleased also. He has already shown his intense interest, presiding over mine reopening ceremonies, visiting mines, watching Zimbabweans with good jobs getting back to work and seeing in concrete form the success of the difficult and necessary reforms he has presided over.

So what is different about Kuvimba?

Kuvimba was set up late last year to take over a set of mining assets, quite a lot under judicial management, but which on careful examination appeared to be fundamentally sound, that is they had large ore bodies that could be mined profitably rather than being worked-out holes in the ground fit for little but conversion into toxic-waste repositories.

That was a crucial first point. Some State-owned enterprises are almost trying to resuscitate the ox-wagon industry, an exaggeration perhaps, but are kept going because they are there rather than because they are needed. But when you start with mines that can produce for years to come, you have something to work with.

The next point was to examine why these assets, which had all been in the pure private sector and many owned by external investors, had failed or were limping along under a court-appointed manager owing money to everyone. Digging in it was found that the owners had not been reinvesting profits in good times, and in an incredibly cyclic industry like mining that is critical, and had been milked for revenue, basically a form of asset stripping.

Inadequate management was, in many cases, unhelpful and recruiting decent managers difficult since the best people, and Zimbabwe has produced some first-class mine managers, prefer working for success stories, rather than taking orders to run something into the ground.

The topsy-turvy Zimbabwean economy with its bouts of hyperinflation, and a foreign currency policy administered by bureaucrats and diktat rather than markets, made life difficult for some of these investors and they decided not to bother. And political decisions in the declining years of the First Republic were another big turn-off.

This was not to say that all investors were turned off. Some managed rather well and saw the potential of the Zimbabwean mining industry and were willing to make the effort to ride out the storms in the expectation that we would be able to sort out the fundamentals. With the advent of the Second Republic they have justified their faith and have taken the lead in pushing forward. That example made Kuvimba possible.

The second interesting point about Kuvimba when it was set up was getting the structure and management right. For a start, private investors took 35 percent of the equity and, from what can be gathered, did this through a single entity. And those investors, like all investors, were in the operation to make money and had no doubt read the geology reports and studied the accounts very carefully before coming in with their cash.

The State’s 65 percent was not a single investment, but rather split between a number of interested parties. That provides a large block of important shareholders who are not going to let one bureaucrat make decisions. It is fairly obvious now that the Government saw its investment as a way of funding, without taxpayer assistance, a number of crucial areas, everything from raising money for venture capital for youths, starting the conversion of public service pensions to a fund rather than an annual Parliamentary vote, to starting to implement the critical deal with the expropriated farmers. And the dividend cheques still give Minister Ncube a decent sum for his capital budget.

But critically the public entities and funds that were allocated equity are reliant on Kuvimba working well. They are not going to tell professionals how to mine gold or nickel or platinum, or who to hire to do the digging, but are going to be looking over the management shoulders to make sure that the business is run properly and, critically, justifies the investments.

The next step, after securing investment, was to get the management right. Rather than “jobs for the boys”, that is well-connected former school friends, relatives or in-laws, Kuvimba went for the professionals, largely chosen by the private investors. This started with the CEO, someone who climbed the greasy pole in a major South African mining house, restructured a failing set of mines in South Africa and was seeking a new challenge.

The chairman, the recently-retired number two public servant who had the depressing experience of looking over failing State enterprises and so knew what can go wrong, was there to represent that block of public shareholders and sort of make sure that Kuvimba’s managers delivered, without telling them how to dig holes in the ground, and generally provide that oversight a proper board is supposed to give and often, in the State sector, has failed to do. With a decent board, with muscle, asking the right questions, on time, managers know what is expected and, most importantly, the Zimbabwe Anti-Corruption Commission does not have to hang around clutching handcuffs.

So we have the formula, a Second Republic formula for its first major State enterprise: a public-private partnership, decent assets, a dispersed State shareholding, a professional management and a board that has the muscle to do its job. And zero corruption.

And the results are coming in. Freda Rebecca gold mine is producing record quantities of gold, 300kg in May. That comes to around 24 of those big bars you see in pictures of Swiss bank vaults or Fort Knox. Shamva Gold Mine is out of the woods, has rehired the miners whom the judicial manager had to let go, is back in full production and has plans to tackle the next block of the ore body with an open cast mine. Its target is 400kg a month. Bindura Nickel, and ZimAlloys, are back in producing, refining and selling nickel. And the joint investment with a Russian giant for the third huge platinum mine is on course and should next year start adding to the revenue.

There has been talk about floating Kuvimba on the Zimbabwe Stock Exchange. That needs to be seriously considered. It first of all values the shares that the public and private entities hold, even if most investors want to hold on to their stakes. Secondly it allows new equity to be raised when necessary, important for a growing concern. While existing shareholders obviously are keen to retain present dividend income, and see it rise, if a business is growing properly then that is possible as well as seeing more shareholders coming in with properly-priced investment.

Thirdly a floatation would allow other Zimbabweans to invest directly. Very few people can ever own a gold mine,  nickel or a platinum mine. But they can own a few hundred shares in a well-balanced group and enjoy the modest “bonus” at dividend time. The failed and simplistic indigenisation policy of the First Republic was never going to empower ordinary people, and was built around the false premise that there was a fixed block of wealth that could be divided differently. But that does not mean ordinary Zimbabweans should not be able to participate directly in the most productive sectors of the economy.

But regardless of how the future opens up, the main lesson from Kuvimba is that given the right conditions, a State-owned enterprise can be properly run, can be honestly and properly managed, can contribute to the country and the fiscus. It provides a model for others.

Business Weekly