Zimbabwe's Kuvimba to raise $1bn for new mining projects

The company was established last year and is 65% owned by the government

Zimbabwe's unlisted Kuvimba Mining House is seeking to raise $1 billion for its gold and platinum projects. Naashon Zalk / Bloomberg News

Zimbabwe's unlisted Kuvimba Mining House is seeking to raise $1 billion for its gold and platinum projects, including a gold mine that could produce 150,000 ounces a year, as well as exploration, its chief executive said on Friday.

Kuvimba was established last year and is 65 per cent owned by the government with the balance held by management through a Mauritius-based company Quorus.

David Brown said in emailed responses to questions from Reuters that the bulk of the capital expenditure would be spent on bringing Shamva Gold Mine, which was bought from British-based Metallon Corp in 2019, into full operation in around three years' time.

Metallon had put Shamva under care and maintenance in early 2019 because of mounting debts.

Zimbabwe, grappling with its worst economic crisis in more than a decade, is pursuing an ambitious plan to raise mining output and earn the country $12bn a year. Platinum and gold mining are seen as an anchor of that drive.

Rising metals prices could help attract investors into mineral extraction to generate much-needed foreign currency.

Gold gained about 25 per cent in 2020 as global central banks and governments delivered economic stimulus, laying the ground for higher inflation and currency debasement. The price of platinum also rose more than 10 per cent.

Mr Brown said the money would be raised from "three sources – internally-generated cash flows, debt funding and possibly equity funding. The first two sources are the preferred route at this time".

Kuvimba would use part of the $1bn to fund developments at Darwendale platinum mine over the next 24 months.

Russia's Vi Holding, through its JSC Afromet subsidiary jointly owns the Darwendale venture near Harare.

Kuvimba is also majority owner of listed Bindura Nickel and is seeking to acquire chrome and more gold assets, Mr Brown said.