Platinum miner Zimplats is reviewing its power usage model as part of cost-cutting measures aimed at maintaining viability. The cost of power, which is reported to have increased by at least 60 percent coupled with the continuing decline in the world price of platinum, is posing serious viability threats to most mining entities.
Platinum has been hovering at all-time low prices of between US$1 375 and US$1 475 per ounce on the global markets as the surplus production continues to exceed demand.
Zimplats chief operating officer Mr Stanley Segula said the platinum giant was assessing its current power usage patterns with a view to improving efficiency and eventually contribute to huge cuts in cost for the mine.
"The push factor on the cost front is a bit of a challenge. The cost of power in particular is inhibiting. It is coming up at a time when the prices are going down," he said. "We have brought in an Indian consultant who is looking at our installations and consumption so we are looking into reviewing the system such that we see optimised power usage," he said.
In the first quarter ending March, the platinum miner posted a 2 percent drop in production blaming it on industrial action by a section of the workforce.
The platinum sector has been gloomy with several mines ceasing operations citing high costs of production as well as the falling platinum prices globally.
However, global finances firm Morgan Stanley believes that the auto industry will use more than US$7 billion worth of platinum this year.
According to precious metals analysts, there will be a nearly 20 percent increase in the amount of platinum used to produce catalyst systems.
Zimbabwe is the third largest platinum producer in the world after South Africa and Russia.