28 August 2012

Zimbabwe: Zimplats Expansion Plans Hit Snag

Platinum miner Zimplats has said the company's Phase 2 expansion project could be delayed due to cash constraints and weak commodity prices prevailing on the international market. The expansion project involves construction of a 30 000-megalitre dam and development of a new underground mine.

Other investments under the programme included a concentrator and related infrastructure which were scheduled to be commissioned by April next year.

This was supposed to increase capacity by 100 percent by March 2015.

In terms of production, this was set to increase to 270 000 ounces, and an additional 1 000 jobs created.

Zimplats chief executive officer Mr Alex Mhembere said difficulties prevailing in the global platinum industry might hamper its expansion plans.

"Completion date for the project is due for 2015, but could be delayed due to cash constraints and weaker base metal commodity prices," he said.

"The fundamentals for platinum mining in Zimbabwe still remain strong; however, the success of our Phase 2 expansion being completed by 2015 will be strongly dependent on strong metal prices and cash conservation measures for 2013."

The platinum industry has been plagued by low demand from the automobile industry in Europe which has been hard hit by a debt crisis.

This, coupled with ever rising operating costs, has seen prices of the metal trading at an all-time low of between US$1 375 and US$1 475 per ounce.

As a result, several platinum mines have been forced to scale down operations with some ceasing operations entirely. Zimbabwe has the world's second largest known platinum reserves in the world after South Africa.

Currently, there are three mines operating in Zimbabwe, namely Zimplats, Mimosa and Unki platinum mine. In 2011, at least 340 000 ounces of the white metal were produced in the country.

New Ziana

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