Vusumuzi Dube
LOOKING at the amount of assets it controls, Kuvimba Mining House (Kuvimba) is quite unwieldy.
It has multiple gold, platinum, rare earths, energy and base metal mines and permits spread across the country. All the minerals are different in various respects — the geologies associated with them, extraction, processing, the behaviours of their markets and so on.
Running that conglomerate efficiently is onerous, almost impossible.
The Mutapa Investment Fund (MIF), our sovereign wealth fund, noted the difficulty that comes with running Kuvimba in the state it was and took a master stroke of a decision to split it into leaner, more focussed verticals.
It now has Mutapa Gold Resources, Mutapa Base Metals, Mutapa Energy Minerals, Mutapa Platinum Group and Mutapa Frontier, which will focus on rare earths and frontier minerals. It has appointed some of the industry’s best and most experienced professionals to lead them.
Mutapa Gold Resources will be headed by Mr Trevor Bernard, Mutapa Base Metals by Mr Godwin Gambiza, Mutapa Energy Minerals by Mr Innocent Rukweza, and Mutapa Platinum Group by Mr Munashe Shava.
Explaining the rationale behind the unbundling, MIF chief investment officer, Mr Simba Chinyemba, said there is a lot for the country to gain from the new structure, than from the old one.
“We are rationalising this structure to create a more streamlined and efficient ownership model,” he said.
“What we are doing is neither unique nor experimental. It simply reflects how the world’s leading mining houses organise themselves to be effective, accountable and aligned with long-term shareholder outcomes.”
He added:
“Diversified conglomerates often suffer from a conglomerate discount where value is lost due to a diminutive focus. By moving to these commodity-specific vehicles, or verticals, we are removing administrative layers and ensuring that our technical expertise is laser-focused on the unique fundamentals of each mineral.”
As mentioned, the MIF has made a smart move by splitting Kuvimba.
We hope that the executives who have been picked for top roles at the new units will work hard to ensure that the outcomes of the unbundling exercise will justify the decision.
Indeed, as a sovereign wealth fund, the MIF belongs to 16 million citizens of this country. They are the stockholders who want the fund to bring in the dividends that its equivalents elsewhere across the globe are bringing to their economies.
Most sovereign wealth funds worldwide are built on a foundation of resources, especially oil. The oil that must drive Kuvimba is the gold, platinum, chrome, coal, lithium and rare earths that it controls.
What the $2 trillion Norwegian, Chinese ($1,3 trillion) and Emirati ($1,2 trillion) sovereign wealth funds are doing to stabilise and future-proof the economies of those countries is what the MIF and by extension, Kuvimba must do to Zimbabwe.
Online Reporter