Karo Resources, lenders in US$350m funding talks

LIVINGSTONE MARUFU

Resource firm Karo Resources is in advanced discussions with Cairo-headquartered African Export–Import Bank (Afreximbank) and local financial institutions to raise US$350m for its platinum project along Zimbabwe’s Great Dyke.

The project is currently in the development phase, with construction underway and trial mining already commenced.

Of the total funding sought, Karo is negotiating to secure US$250m from Afreximbank, with the remaining US$100m earmarked for mobilisation from the domestic market.

It is understood that some of the country’s largest financial institutions were on the ground on Thursday to deliberate on structuring the local funding component, in a move that could position Karo among Zimbabwe’s major platinum producers.

At least four banks have expressed strong interest in participating in the capital raise, with CBZ Holdings and Stanbic Bank Zimbabwe understood to be leading efforts to mobilise the US$100m tranche.

In an interview, CBZ chief executive officer Lawrence Nyazema declined to disclose details of the transaction or the full list of financiers but confirmed his institution’s commitment to the funding initiative.

“We are keen to ensure that, out of the US$100m being raised locally, we play a significant role. I also challenge and appeal to other financial institutions in the country to meaningfully support the realisation of this project,” Nyazema said.

The Karo project is designed to produce approximately 360,000 ounces of platinum group metals (PGMs) annually in its first phase,slightly over half the output of Zimplats.

At a national level, Zimbabwe currently accounts for about 9% of global PGM production. With projects such as Karo coming on stream, that contribution is projected to rise to around 12%.

Majority shareholder Tharisa, which holds a 70% stake in Karo Mining Holdings, has already invested approximately US$200 million over the past four years since the project’s inception.

Nyazema said the remaining US$350 million would be critical in taking the project to cash flow stage within a relatively short timeframe.

“They still require US$350m, and that is where we come in, alongside international and local financiers. Our role is to ensure the funding is secured so the project reaches cash flow. If the full amount were raised today, it would take about 15 months to achieve cash flow,” he said.

“That means mining, milling, and exports would all be underway. The first phase alone is projected at around 225,000 ounces.”

He highlighted the project’s strong near-term revenue potential, underpinned by firm global PGM prices.

“PGM prices are currently above US$2,000 per ounce. At 225,000 ounces, that translates to nearly US$500 million in export proceeds within 15 months, around mid-2027. This is not a distant prospect; it is something that could materialise within a year,” Nyazema added.

Beyond export earnings, the project is expected to deliver significant socio-economic benefits, including large-scale employment and infrastructure development.

“The project is expected to employ around 10,000 people. If each employee supports five dependants, that’s about 50,000 livelihoods directly impacted,” he said.

Karo’s development blueprint also includes critical infrastructure such as dam construction, power generation facilities, as well as the building of clinics and schools in surrounding communities.

“For me, the key impact lies in the 10,000 jobs, the half a billion dollars in export receipts, and the long-term nature of the investment. This is a project with a lifespan exceeding 50 years, potentially stretching beyond a century,” Nyazema said.

“It could contribute at least 1.5% to GDP, ticking virtually every box—economic growth, employment creation, community development, and export expansion.”

He added that the project represents a generational investment.

“This is a mine that could employ me, my children, and even future generations. It is a long-term national asset.”

Nyazema also noted that CBZ has been involved in the Karo project from its early stages, including participation in a bond issuance on the Victoria Falls Stock Exchange, which raised close to US$40 million.

“As CBZ, we have been there from day one. We supported the bond listed on VFEX, which raised nearly US$40 million,” he said.

He added that while CBZ was not traditionally a major player in mining finance, the bank has significantly increased its exposure to the sector in recent years.

Over the past three years, CBZ has deployed close to US$500m into mining, spanning short-term facilities and long-term project finance, with a significant portion directed towards gold operations.

However, Nyazema said the bank is now broadening its scope beyond gold, citing strong confidence in the Karo project.

“We believe in the mining sector’s potential, and while gold has been a major focus, we did not stop there. We saw the Karo opportunity and moved decisively,” he said.