Kuvimba pays US$5m dividend

Minister of Finance and Economic Development Mthuli Ncube’s address on the occasion of dividend payout ceremony to shareholders of Kuvimba Mining House on Wednesday.

I would like to take this great opportunity to welcome you all to this important occasion which is to celebrate the payoffs from investments in the form of dividends, which several Government institutions are receiving from investing into Kuvimba Mining House (KMH) today.

This event has unfortunately been arranged as a virtual event, in order to comply with strict Covid-19 protocols, laid out recently by the Government. We certainly would have wished for this historic event to be held otherwise, but we are still grateful that we have reached this important milestone today.

Why is this dividend declaration ceremony, by Kuvimba Mining House, such an important occasion to the Government and the People of Zimbabwe?

Let me start by stating upfront that, we are in fact celebrating today, the results of a strategy which Government of Zimbabwe has taken to create an enabling environment for the reactivation of previously underutilised economic assets.

Kuvimba is an example of the 2nd Republic’s thrust to reawaken the Zimbabwe economic potential, by unlocking value, out of various natural resource and mineral endowments.

The mining house is playing its role in ensuring that Government’s vision of a US$12 billion-dollar mining economy by 2023 is achieved. By playing its part, Kuvimba is thus contributing not only to the attainment of national strategic objectives under NDS1, but the pursuit of Vision 2030.

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 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.

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 meeting its domestic financial obligations.

Let me hasten to say that across all sectors of the economy, there are hordes of other opportunities available for partnership (PPPs, Diaspora Investments, FDI etc) for the successful implementation of the NDS1, including attainment of the targeted National and Sectoral Outcomes, which hinge on the ability to mobilise financial resources required for the execution of planned programmes and projects.

Partnerships, such as the one entered by the various shareholders of Kuvimba Mining House, are in line with SDG 17, which emphasize on strengthening partnerships, to achieve Sustainable Development Goals (SDGs), including SDG1; which aims to end extreme poverty through creation of job opportunities.

As it stands, KMH now employs 3500 workers including women and youths, and work is currently underway to ensure the expansion of the company’s footprint, which will lead to the creation of more high quality employment opportunities.

Today, KMH is paying a US$5,2 million dividend to its local shareholders following an impressive performance during the financial year, which ended March 31, 2021.

The majority shareholding in Kuvimba Mining House is held by a broad spectrum of local institutions, broken down as follows:

1. 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.
2. 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.

1. 5 percent shareholding is held by the Insurance and Pensions Commission and proceeds thereof are earmarked for compensation in respect of legacy pensions. 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.
2. 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.
3. 7 percent of shares in Kuvimba are held by the Public Service Pension Management Fund.
4. 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.
5. The Government of Zimbabwe holds 21,5 percent equity in Kuvimba.
6. The remaining 35 percent is held by the private sector investors which includes management.

In line with the shareholding outlined above, the distribution of the dividend for Government related Institutions according to the value of shareholding is as follows: –

This diversity of Shareholding is an important pillar of not only the future growth of the company, but demonstrates that the economic benefits of this mining asset should flow to Zimbabweans via the various structures outlined above.

As we accept the dividend payouts from Kuvimba Mining House today, let us not lose sight that these resources represent the renewed commitment by Government to foster economic empowerment to the people of Zimbabwe, including but not limited to women and youths and veterans of the liberation struggle through the National Venture Fund administered by the National Venture Capital Company of Zimbabwe (NVCCZ).

This is consistent with Governments thrust of driving inclusive and shared growth. The NDS1 also places prominence on equality of opportunities and non-discrimination, as well as empowerment of all Zimbabwean citizens, a principle summarised as “leaving no-one and no place behind”.