Mystery of sanctioned tycoon's assets in Zimbabwe revival plan
- In December, Zimbabwe's government announced a multibillion-dollar project called Kuvimba Mining House that would hold some of the nation's most valuable gold, platinum, chrome and nickel mines.
- President Emmerson Mnangagwa said in December the venture will help "in unlocking the inherent richness and value of our country's mineral deposits."
- The venture would be 65% owned by the government and 35% by private investors, Finance Minister Mthuli Ncube said, predicting it would be "highly profitable" within two years.
In December, the government of Zimbabwe announced a multibillion-dollar project called Kuvimba Mining House that would hold some of the nation's most valuable gold, platinum, chrome and nickel mines and whose revenue would be used to revive the country's moribund economy. The venture would be 65% owned by the government and 35% by private investors, Finance Minister Mthuli Ncube said in a January interview, predicting it would be "highly profitable" within two years.
President Emmerson Mnangagwa said in December the venture will help "in unlocking the inherent richness and value of our country's mineral deposits," according to the state-controlled Herald newspaper.
The announcement was met with skepticism among local journalists and some industry analysts. Decades of graft and economic turmoil have left once-prosperous Zimbabwe a ruined state. The country has little formal employment, and inflation last measured 194%. Past state works projects failed to turn things around, not least because public money had a way of disappearing into private hands. Mnangagwa's declaration that "Zimbabwe is open for business" and promises of a fresh start after he came to power in late 2017 have come to nothing.
The government has publicly and repeatedly denied Tagwirei has any involvement in the Kuvimba venture and Tagwirei didn't respond to questions about whether he still has a stake in or control over any of the assets that now fall under Kuvimba. Connections to a person under US sanctions might deter investors and complicate the government's hopes to sell a stake in Kuvimba on a foreign stock exchange. The US sanctioned Tagwirei for using his political influence to "gain state contracts and receive favoured access to hard currency" and linked him to the disappearance of $3 billion from a farm-subsidy program, calling him "notoriously corrupt."
Tagwirei didn't answer four calls to his mobile phone or reply to emails seeking comment. He has not spoken publicly about the sanctions.The documents viewed by Bloomberg show that at least until late last year, Tagwirei effectively had control over Sotic, the company that owned some of the largest assets now claimed by Kuvimba, including major platinum and gold mines.
In the response to Bloomberg, Almas declined to comment on its relationship with Tagwirei.
"Pfimbi owns the remaining 35% of Sotic," Almas said. "Sotic owns a number of mining assets in Zimbabwe, some partially owned such as Great Dyke investments and others totally such as the Freda Rebecca Gold Mine."
Christopher Fourie, a former Sotic executive, said in a response to questions that he was hired by Tagwirei to establish Sotic and lead the acquisition of mines including those Kuvimba now claims. A copy of his contract, dated 2018 and submitted in a July 2020 South African court case, describes Fourie as group executive for investment and business development of the company that preceded Sotic, Tagwirei's Sakunda Holdings, and now is listed as one of Sotic's subsidiaries. The contract is signed by Tagwirei in his role as CEO of Sakunda. Sakunda was also hit with sanctions by the US.
In the same month that he filed the court case, Brown was cited by Bloomberg as saying that a unit of Sotic had bought two Zimbabwean gold mines and wanted to buy more. In October 2019, the chairperson of Bindura Nickel told Bloomberg that Sotic had bought a 74% stake in the company.
"After a review of our operations, the investment committee of Almas Fund has expressed its intention to disinvest from Zimbabwe," it said in the March 30 response, citing negative financial impacts from its investment in the country, the pandemic's effect on mining and a need for more debt and investment to realize the projects than previously foreseen.