Mutapa defends US$1.9bn Kuvimba Deal as strategic, cash-free acquisition

STAFF WRITER

The Mutapa Investment Fund (MIF), Zimbabwe’s sovereign wealth fund, has defended its US$1.9bn acquisition of a 35% stake in Kuvimba Mining House (KMH), dismissing widespread misinformation about the deal’s funding structure.

The clarification follows public concern and speculation on social media over how the Government financed the transaction. With this acquisition, the State now holds 100% control of Kuvimba—an expansive mining group valued at US$3.2bn, whose assets include Freda Rebecca Gold Mine, Shamva Gold Mine, Jena Mines, Sandawana lithium project, Zimbabwe Alloys (chrome), Great Dyke Investments (platinum), and Bindura Nickel Corporation.

In a statement, MIF CEO Dr John Mangudya explained that the transaction did not involve a cash payment but was financed through Treasury Bonds with a tenure of up to 10 years, issued as a loan to MIF.

“It has come to the attention of Mutapa Investment Fund (MIF) that there are some social media articles circulating with misinformation on the circumstances surrounding the US$1,9bn, which was used to purchase 35% of Kuvimba Mining House (KMH) by the Government of Zimbabwe,” he said.

“Whilst MIF does not normally respond to such articles, we have found it necessary to provide pertinent information on this matter in the public interest.”

He emphasized that the bonds carry a three-year grace period, allowing MIF to generate value from the KMH assets before any repayments are due.

“The beauty of the transaction was that MIF gained full control of the asset (KMH) funded from the Treasury Bonds, without making a cash payment,” Dr Mangudya said.

He added that MIF plans to “sweat the assets”—boosting production and entering joint ventures to repay the loan before the bonds mature, effectively eliminating any fiscal risk.

The deal lifts the Government’s shareholding in KMH to 100%, distributed among several state-linked entities, including MIF (63%), Datvest Nominees (12.5%), the Insurance and Pensions Commission (5%), and others representing war veterans, women, youth, and civil servants.

Dr Mangudya noted that two independent advisory firms carried out the KMH valuation, using a discount rate of 40% to arrive at a present value of US$1.1bn, equivalent to the US$1.9bn bond’s future value.

Mutapa was capitalized in 2023 through the transfer of selected state-owned enterprises and now manages assets across over 30 investee companies in key sectors including mining, energy, ICT, agriculture, and finance.

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