The Zimbabwe government has explained how it paid for full ownership of Kuvimba Mining House. The state bought the remaining 35 percent stake for $1.9 billion using Treasury Bonds that must be paid back within ten years. These bonds work as a loan to the Mutapa Investment Fund with a three-year grace period before payments start. The government previously held 65 percent of the mining company.
Mutapa Investment Fund head John Mangudya cleared up rumors about the deal that spread on social media. He stressed no cash changed hands since the Treasury Bonds have not matured. The deal gives the government complete control of Kuvimba without making cash payments right away. The fund plans to use the mining assets to make money for repaying the loan before the bonds come due.
Two separate firms valued Kuvimba Mining House at $3.2 billion last October. This high value came mainly from platinum, gold, and lithium assets. The 35 percent stake was worth $1.1 billion based on this assessment. This equals the future value of the bonds at a 40 percent discount rate. The purchase clarifies who owns what in the mining company.
The fund aims to pay off the loan during the grace period through different methods. It plans to form partnerships with other companies and increase gold production to take advantage of high gold prices. After the purchase, government ownership was split among several groups. Mutapa Investment Fund holds 63 percent, with smaller shares going to former farmers, pension authorities, war veterans, women, youth groups, and civil service.
Mutapa Investment Fund head John Mangudya cleared up rumors about the deal that spread on social media. He stressed no cash changed hands since the Treasury Bonds have not matured. The deal gives the government complete control of Kuvimba without making cash payments right away. The fund plans to use the mining assets to make money for repaying the loan before the bonds come due.
Two separate firms valued Kuvimba Mining House at $3.2 billion last October. This high value came mainly from platinum, gold, and lithium assets. The 35 percent stake was worth $1.1 billion based on this assessment. This equals the future value of the bonds at a 40 percent discount rate. The purchase clarifies who owns what in the mining company.
The fund aims to pay off the loan during the grace period through different methods. It plans to form partnerships with other companies and increase gold production to take advantage of high gold prices. After the purchase, government ownership was split among several groups. Mutapa Investment Fund holds 63 percent, with smaller shares going to former farmers, pension authorities, war veterans, women, youth groups, and civil service.
