Zimbabwe’s Landela agrees to buy state-owned gold mines, seeks more assets

PUBLISHED: Fri, 03 Jul 2020 17:09:29 GMT
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HARARE (Reuters) – Zimbabwe’s Landela Mining Venture has reached agreements to take over and revive four idle state-owned gold mines and is in talks to buy more assets from a privately-owned bullion producer, its chief executive said on Friday.

Unlisted Landela is majority-owned by Kudakwashe Tagwirei, an adviser to President Emmerson Mnangagwa and one of the most prominent business people in the country.

Commodities trader Trafigura partnered with Tagwirei in the lucrative fuel sector until buying him out earlier this year. Landela has been on a buying spree of local mining assets since 2019.

Chief executive David Brown, former Impala Platinum Holdings CEO, told Reuters that Landela’s takeover of gold mines run by state-owned Zimbabwe Mining Development Corporation (ZMDC) would be funded through debt and equity.

The mines were put up for sale in 2018 but the government cancelled the process last year without giving a reason.

“Agreements are in place, but a close-out of the process is still subject to being finalised with the appropriate authorities,” Brown said in e-mailed responses to questions.

“I would expect it to be completed in Q3 and will be funded through a mixture of debt and equity.”

The four mines have a capacity to produce at least 85,000 ounces a year, according to ZMDC.

Gold is the single biggest forex earner in Zimbabwe and controlling its production gives Landela greater access to dollars, which are in short supply in the country.

Brown said Landela last month restarted operations at the 21,000 ounces a year Shamva mine after buying it from Metallon Corporation, owned by South African businessman Mzi Khumalo.

Landela plans a bigger open pit mine at Shamva and is in talks to purchase Metallon’s three other gold mines, said Brown.

A Metallon spokeswoman declined to comment.

Until 2017, Metallon was Zimbabwe’s largest gold miner, producing 100,000 ounces a year. A 2016 estimate showed Metallon had a mineral resource of 8.3 million ounces of gold.

“If we can have time to develop the assets properly with the appropriate amount of capital, this will be a significant business,” Brown said.

Last year Landela became partner of Russia’s Vi Holding in the Darwendale platinum project and bought Freda Rebecca gold mine.

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