At the head of Metallon Corporation, Zimbabwe’s largest gold mining company, entrepreneur Mzi Khumalo has become a symbol of the social success of leaders in the struggle against apartheid. Portrait in chiaroscuro of a tycoon with an exciting career path, between brilliant blows and resounding failures.
« You have to dream with both feet on the ground », Mzi Khumalo likes to repeat with reference to Lenin. Reminiscence, no doubt, of his early years in the African National Congress (ANC), where the dominant ideology was then Marxism-Leninism. Arrested at the age of 24 and sentenced to 26 years’ imprisonment for his anti-apartheid activities (mass mobilization, military training and field organization…), he is the 27th prisoner of 1979 on Robben Island, where he was imprisoned until the abolition of apartheid on 30 June 1991, serving his sentence alongside prominent ANC figures such as Nelson Mandela, Walter Sisulu, Govan Mbeki and Ahmed Kathrada. After his years in prison, Mzi Khumalo quickly moved from political activism to business, convinced that liberal pragmatism has more to offer on an individual level than the socialist ideal. It must be said that from an early age, the kid from KwaMashu (township of Durban, where Khumalo grew up), the sixth of ten siblings raised by a widowed mother, develops a strong sense of survival… and therefore business. « The passion for business came to me very early in life, when I realized that money brought power. As a young boy, I started collecting empty oil cans that I sold to sorghum beer merchants in the township. With this business, I quickly earned a lot of money. In 1994, South Africa was hit by an energy crisis; fuel oil was rationed, but thanks to my contacts, I managed to get it and sell it at a profit, » the mining magnate told the South African Sunday Times. His flair and resourcefulness will make Khumalo one of the key players in the underground economy set up to finance the ANC’s activities. When he was released from prison, he served for a time as party treasurer, in charge of the Kwazulu-Natal branch, before returning to his first love, business. « My contribution to business and politics is a direct result of the circumstances surrounding the black South African people under the oppressive apartheid regime, » he continued in the Sunday Times columns.
With the Black Economic Empowerment (BEE) and the liberal shift made by the ANC under Nelson Mandela, Khumalo used his political connections to start his own business. « My release from prison coincided with South Africa’s return to grace on the international scene. And it was essential that the State give us work so that we would not create new social time bombs. As I had skills in finance and business management thanks to a university degree in commerce after my release from prison, I was able to join major international groups directly and move up the ladder, especially in the mining sector« . In 1991, he joined McCarthy Holdings before creating the Capital Alliance group in 1994, which made several major strides and attracted various heavyweights in South African finance (notably the Liberty insurer). Among these feats of arms, the takeover of the then first South African mining company, JCI Ltd. (Johannesburg Consolidated Investments Limited). At the head of the African Mining Group consortium, Capital Alliance raised more than $600 million and acquired a majority stake in JCI at the end of 1996, owned by the powerful Anglo American group. A great deal on paper: the acquired company, which also has interests in coal, ferrochrome and base metals, is the main shareholder of South Africa’s largest gold mine, Western Areas. But under the cumulative effect of the fall in gold prices and a crisis of shareholder confidence, reinforced by an unfortunate association with the sulphurous South African mining magnate Brett Kebble, the adventure quickly turned into a fiasco. And less than a year later, Mzi Khumalo resigned as JCI Executive President.
Metallon Corporation: size and decadence
But man knows how to bounce back and go where you don’t expect him to go. Because it is not in South Africa that Mzi Khumalo lays the foundations of his future empire – (« gold in South Africa is over, […] You just have to accept it and adapt, » the businessman then justifies) but in Zimbabwe, a country that also has a long mining tradition. In the early 2000s, Mzi Khumalo founded Metallon Corporation (formerly Metgold Limited). In October 2002, the structure acquired the gold assets of the British mining group Lonmin Plc. in Zimbabwe for $15.5 million. These assets include four major mining sites: How in southern Canada (50,191 ounces of gold in 2016), Shamva (21,061 ounces), Redwing and Mazowe in the central and northeast (10,106 and 12,060 ounces respectively). Until 2006, gold production increased steadily, with a peak of 156,000 ounces in 2005, making Metallon the country’s leading gold producer (reserves at the four mines are estimated at 8.3 million ounces of gold according to JORC code standards, and between 4 and 6 million ounces according to SRK Consulting’s exploration results).