Zimbabwe's sovereign wealth fund allegedly paid $1.6bn to a group of unknown individuals for shares in a mining group recently linked to a local businessman accused of corruption.

The Daily Maverick reported on July 3 that the Mutapa Investment Fund (MIF) paid the huge sum to some figures for their 35% shares in Kuvimba Mining House (Kuvimba), which the MIF recently took over. 

Graft-accused Kudakwashe Tagwirei, an adviser to President Emmerson Mnangagwa and other individuals, recent media reports alleged, held 35% in Kuvimba, which has multiple gold, platinum, lithium and nickel mines in the southern African nation.

The Sentry, a US-based investigative outfit, exposed the deal in a report on July 3. It said that evidence gathered by a Zimbabwean news outlet, The NewsHawks, shows that the $1.6bn paid out was part of a $1.9bn loan MIF got from the government.

“The Sentry’s analysis suggests that Mutapa paid a grossly inflated price for the shares,” it said. The report noted that until recently, the state had owned 65% of Kuvimba and private investors had held 35% of the shares.

The US put Tagwirei under sanctions in 2020 for allegedly using his proximity to the political elite to engage in corruption.

MIF secured the loan purportedly to revive some of the 20 state entities it runs.  

“A $1.6bn price tag for a 35% stake would value Kuvimba at $4.6bn overall — triple the $1.5bn valuation given to Kuvimba by the government in 2022. This would raise serious questions about whether Mutapa has grossly overvalued the shares,” Daily Maverick quoted The Sentry report as saying.

“[A] $4.6bn valuation seems distinctly frothy given that Kuvimba’s other mines have had mixed fortunes: Declining lithium prices have caused stockpiling, and the firm’s platinum and nickel projects are either inactive or loss-making.”

The US entity called, in its report, Zimbabwe's independent institutions to probe the Kuvimba deal.