Page 9 - DMEA Week 18 2022

DMEA SUPPLY & PROCESSING DMEA

Zimbabwe seals deal to repay

debt to Trafigura Group in kind

AFRICA ZIMBABWE has negotiated a deal with global (KYC) policies meant to prevent engagement
commodities trader Trafigura Group under with people involved in money laundering or
which it will repay $225.6mn in debt for past other financial crimes.
supplies of petroleum products using revenues Neither Tagwirei, Kuvimba nor the minis-
from mineral exports, Bloomberg reports. ters responded to the news agency’s requests for
The southern African country ran up the debt comment. But the arrangement indicates that the
after taking delivery of fuel supplied via loans unpaid debts that were incurred by the Reserve
from Singapore-based Trafigura from 2016, Bank of Zimbabwe would be transferred to the
according to the news agency. Finance Ministry, which controls Kuvimba.
After viewing documents relating to the The deal, drawn up by the London branch
agreement, Bloomberg reported that Trafigura of law firm Reed Smith LLP, says: “Kuvimba
was set to gain control over some of the revenues would pay Trafigura $6mn a month and retain
to be generated by nickel and gold exports of 40% of payments to Freda Rebecca and Shamva
state-owned Kuvimba Mining House, an asset gold mines, as well as the nickel mines owned
reportedly linked to local businessman Kudak- by Bindura Nickel Corp., in so-called collection
washe Tagwirei, who was recently sanctioned by accounts. Freda Rebecca, Shamva and Bindura
the US and UK for alleged corruption. Nickel are subsidiaries of Kuvimba. Trafigura
The news agency said that Trafigura con- would also have the right to approve buyers of
firmed the deal and added that it ended a previ- the metal selected by Bindura and would have
ous fuel-trading business relationship it had with right of first refusal on the metal. It would also
Tagwirei in 2019, well before the businessman have the right to buy the gold produced by Freda
was sanctioned. Rebecca and Shamva.”
“Trafigura Zimbabwe has provided credit on The payments, says the pact, will not be sub-
petroleum product deliveries into Zimbabwe ject to tax and documents will not be submitted
and is scheduled to receive payments,” the trader to any authority in Zimbabwe. It has sections that
said. bar all parties involved from entering into “any
“Trafigura operates a robust compliance pro- transactions with any person which is a sanc-
gramme, aligned with international standards. In tioned person.”
accordance with this programme, Kuvimba has Trafigura defended the use of such language,
undergone and satisfied our strict KYC require- saying it was “common and prudent business
ments.” It was referring to know-your-customer practice” in commercial arrangements.™

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