Latest News Editor's Choice


News / National

Landela and CBZ get green-light to buy gold

by Staff reporter
23 Jun 2020 at 14:58hrs | Views
President Emmerson Mnangagwa's adviser and Zanu-PF benefactor Kudakwashe Tagwirei could soon become Zimbabwe's biggest gold buyer after getting a special permit from Fidelity Printers and Refiners.

Gold deliveries to the country's monopoly gold buyer and exporter, Fidelity, have declined as the Reserve Bank of Zimbabwe company is short on foreign currency to pay for deliveries. This has led to increased smuggling, as producers seek markets outside Zimbabwe.

Now, Tagwirei's Landela Mining Venture has hammered out a deal with Fidelity which will see the Commercial Bank of Zimbabwe – where Tagwirei has a majority 30 percent shareholding through Akribos Wealth Managers (Pvt) Ltd – turning a section of its banking halls into specialised gold-buying and handling centres.

Fidelity announced on May 26 that large scale gold buyers must own mines producing at least 50kg of gold per month, a move designed to flush out foreign buyers.

Tagwirei, whose Sakunda Holdings company was accused by Parliament of fleecing public funds through the opaque US$3 billion Command Agriculture scheme, has embarked on a frenzied acquisition of mining assets, including Freda Rebecca Mine in Bindura which concluded the deal with Fidelity.

Landela Mining has also taken majority shareholding in Jena Gold Mine, Elvington Mine, Golden Kopje Mine and Sabi Gold Mine from the state-owned Zimbabwe Mining Development Corporation as Tagwirei expands his mining portfolio.

The company also owns Bindura Nickel Corporation and is a joint venture partner in the US$500 million Russian-led Darwendale platinum mine project.

Freda Rebecca Mine says it plans to buy one tonne of gold every month for the next three years under the arrangement with Fidelity and CBZ, adding up to 12 tonnes annually – almost half of the total 27.6 tonnes delivered to Fidelity last year.

Under the plan, Freda Rebecca will buy from sellers at the current US$45,000 per kg of gold set by Fidelity. The company says it is mainly targeting small-scale miners operating on its 60,000 hectares of gold claims chiefly in Manicaland and Mashonaland provinces, but by using the convenience of CBZ's branch network and guaranteed cash payments, the bank could easily eclipse Fidelity as the primary gold buyer, although the gold will ultimately be sold to the RBZ subsidiary.

"We're basically buying gold from small-scale miners, who are operating from our claims, so we are mobilising unaccounted for gold and we officialise it to Fidelity Refiners and Printers," Freda Rebecca Gold Mine general manager Eliakem Hove said, according to The Standard.

"This gesture helps towards ensuring transparency within the gold sector. We have close to 500 small-scale miners who we are empowering through this initiative."

Tagwirei is Zanu-PF's top donor, pouring millions of dollars into the party's operations and their last election campaign in 2018. According to Africa Confidential, he snapped up CBZ shares using money from Command Agriculture. The respected magazine claimed Tagwirei was "fronting" President Mnangagwa in that deal, suggesting the Zanu-PF leader has a controlling stake in Zimbabwe's biggest bank by assets.

Tagwirei is also believed to have used Command Agriculture proceeds to acquire over a dozen mines countrywide.

The reclusive tycoon, whose previous main investment was in the petroleum industry through Sakunda, has recently been linked to a dodgy deal in which Landela will import 662 buses for the state bus company, ZUPCO, netting him over US$60 million in profit.

Zimbabwe's total gold production was 27.6 tonnes in 2019 down from 33.2 tonnes in 2018.

Gold export earnings in the first five months of this year totalled US$409.74 million, representing a three percent rise from US$398.65 million in the same period last year, latest statistics from Fidelity show.

Source - zimlive

Subscribe

Email: