PLATINUM mining giant Mimosa Mining Company will next year start sinking a new shaft at its Zvishavane mine parallel to the existing one as part of mine development to sustain future operations when the lifespan of the current shaft expires.
Mimosa managing director Mr Winston Chitando told Herald Business yesterday that the firm would sink a new shaft over the next four years to replace the existing one when it runs the course of its 20-year lifespan.
The plan demonstrates the platinum mining giant's commitment to continue investment and the shareholders' desire to remain in Zimbabwe.
The plan also demonstrates Mimosa's comfort with the indigenisation programme which they have already taken steps to comply with.
"At the moment we have started a programme to sink a new shaft within the current capital budget and we are starting next year.
"We have to sink another shaft parallel to the current main shaft because what happens is that if you continue mining sideways from the current shaft the haulage distance would cause inefficiencies," said Mr Chitando.
"To sink a shaft like that takes a minimum of four years, so in terms of our planning we have to sink another shaft. In terms of capital, we have to continuously invest, but the biggest concern which was there was obviously that if the price (of platinum) went down the money that is available for reinvestment would be less," said Mr Chitando.
Mine development, said Mr Chitando, was critical as most mines operate on a 20-year life cycle, meaning that they have to plan ahead to guarantee access to resources, which he said would not be possible if that is not planned or prepared for.
However, Mr Chitando would not be drawn into revealing the capital budget for the drilling of the new shaft.
Mr Chitando was responding to media enquiries on the implications of the drop in the international prices of platinum to the firm's operations. The international prices of platinum have, however, since stabilised.
Platinum is currently trading around US$1 680 per ounce on the international commodity markets, but had reached a monthly high of just over US$1 700/0z on January 18.
Since the platinum mine is continuously reinvesting profits into mine expansion and development, continued decline of prices would affect the firm's plans as it would not be able to realise projected income in line with its plans.
Already, Mimosa is working on a pre-feasibility study for the phase six expansion programme, which the company expects to complete before the end of this year.
After the pre-feasibility study the mining firm would then undertake what is known in mining as the bankable feasibility study before eventually embarking on the actual project implementation.
Mimosa, which is now owned 49 percent equally between Aquarius and Implats of South Africa, produces about 100 000oz of platinum per annum and 200 000oz of 4E minerals (platinum, palladium, rhodium gold), Mr Chitando said.
Mimosa is one of the first mining companies to comply with the Government's indigenisation programme and has agreed to sell 51 percent of its equity to local communities and the National Indigenisation and Economic Empowerment Fund. Further, the company has also provided funds for the establishment of a community share trust.
The indigenisation and economic empowerment programme is meant to bring previously marginalised black Zimbabweans into the mainstream economy. As such, Government passed a law compelling foreign-owned companies to sell to indigenous black Zimbabweans at least 51 percent of their shareholding.