The Reserve Bank of Zimbabwe (RBZ) has indefinitely suspended its plans to partially privatise Fidelity Printers and Refiners (FPR).
Nearly two years ago, the apex bank announced intentions to dispose of its 60% controlling stake in the entity, the Zimbabwe Independent reported.
The shelved plan to privatise was premised on plugging widespread gold smuggling which is estimated to prejudice the country US$1.5 billion annually.
Plans to sell the government’s 60% controlling stake in FPR were first announced by the RBZ in 2020 and reinforced during the course of 2021.
If the partial privatisation plan had been carried out successfully, the central bank would have retained 40% of FPR.
In 2021, the Independent reported that Kuvimba Mining House, Better Brands, RioZim, Caledonia, Pan Africa Mining, Zimbabwe Miners Federation (ZMF) and Yellow Credit were potentially angling to take over the country’s sole gold buyer.
The publication also reported that the transaction, then valued at US$49 million, was derailed by reservations expressed by some of the private players over Kuvimba whose shareholding structure and beneficial owners remain shrouded in mystery.
There were also fears that once privatised, the entity would be under the US sanctions radar.
Formed in 2020, Kuvimba is now among the country’s largest gold producers having bought lucrative gold assets across the country, including the Shamva Mine, Freda Rebecca, and those of Elvington, Jena, Golden Kopje and Sandawana mines owned by Zimbabwe Mining Development Corporation (ZMDC).
If the transaction had sailed through, Kuvimba was going to hold 12% equity in the reconfigured FDR.
RBZ governor John Mangudya last week told the Independent that the planned privatisation of FPR was “no longer a priority” to the apex bank. He said:
The suspension of the privatisation of FPR was done by the RBZ board which deemed it necessary to retain FPR in its current state. The matter is no longer a priority to RBZ.
However, Mangudya did not explain why the government had made a U-turn on its initial plans to cede its controlling stake in FPR.