Platinum miner Zimplats regains its shine

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Business Report

Zimplats’ profit after royalties improved sharply due to lower cash costs and increases in mine throughput, the Zimbabwean unit of Impala Platinum said last week.

For the quarter to the end of September, Zimplats reported a 118 percent rise in profit to almost $6 million (R82.8m), boosted by a 32 percent decline in cash costs and significant jumps in milled and mined ore.

Impala has shown commitment to its unit in Zimbabwe despite the uncertain economic environment in the country.

Agreement

Zimplats said it had reached an agreement with the government to transfer 10 percent into the hands of an employee share ownership in line with empowerment laws requiring foreign firms to give up 51 percent shares into the hands of black Zimbabweans.

The South African mining house has also committed to investing in a Zimbabwean refinery as it is refurbishing its Selous facility, bringing itself in line with government demands for increased mineral beneficiation inside the country.

Anglo American Platinum has also committed to investing in a separate smelter, according to company officials and Mines Minister Walter Chidakwa.

Zimplats registered a return to profitability last week, with profit after royalty payments jumping 118 percent to $5.9m compared with a loss of $32.5m in the previous quarter.

Revenues at $108m were also 67 percent stronger on the previous quarter, it said.

“Ore mined improved by 10 percent from the previous quarter largely due to an increase of 117 400 tons in ore mined from the open-pit operation. Production from the underground mines increased by 32 900 tons compared with the previous quarter,” Zimplats said in a report for the quarter period under review.

Redevelopment of the Bimha Mine, which collapsed last year and is located 150km south-west of Harare, was “progressing well and the mine is on schedule to reach full production in April 2018”.

However, head grade for the period was lower owing to “the increase in the volume of lower grade open-pit ore”, production of which had covered for output loss from the closed Bimha Mine.

Ore milled volumes and resultant platinum group metals (PGMs) in concentrate production increased by 14 percent compared with the previous quarter, “in line with higher mining production” achieved in the period under review.

Smelter stoppage

Zimplats said about 34 834 tons of metal in concentrate was smelted during the September quarter to produce 133 505 ounces of PGMs.

This represents a massive 88 percent increase on the previous quarter, in which production of metal matte was affected by a stoppage at the smelter.

“The previous quarter metal in converter matte production was adversely affected by the smelter outage, which resulted in 11 413 tons of unprocessed concentrate by the end of the quarter.

“The concentrates stockpiled in the previous quarter were not smelted in the current quarter due to capacity constraints at the smelter.”

Zimbabwean miners are bracing for new taxes and fees after the government said it would introduce a new indigenisation levy and another tax to fund a state exploration firm.

However, South African platinum producers are committing to their Zimbabwe operations as problems and cost increases back home mount.

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