4 September 2014

Zimbabwe: Unki Focuses On Expansion

Anglo America Platinum's Zimbabwe platinum mining arm, Unki Platinum Mine is focused on the completion of phase two of its projects after pledging $25 million towards the expansion of its operations.Responding to the Herald Business yesterday, AngloPlat media and external relations manager Mrs Mpumi Sithole confirmed the company's intentions to expand.

"Please note that Unki will continue with the completion of the remaining projects to bring its Phase 1 project to completion," said Mrs Sithole.

Remaining project work currently in progress includes primarily the construction of the mine-employee housing complex in Shurugwi worth about $25 million.

The mining company has so far resumed expansion which was temporarily put on hold last year due to the fall of platinum prices on the global market.

For the half year to June 2014, AngloPlat said Unki mine and other joint ventures portfolio in the group which remained strike-free all showed year-on-year improvements in their respective production capacities.

Unki maintained its production for the period at 30 000 ounces in line with the previous year.

So far a twin-decline shaft system has been put in place at Unki mine to provide access to underground workings for underground personnel, material as well as for ore conveyance and both decline shafts are at 1,770 metres from the portal on surface.

With current operations now properly established, studies are in progress to determine the optimal expansion of the mine to a level that would significantly contribute to the company's strategy to lower its operating cost base.

Twelve mining sections have so far been established, 10 of which are fully equipped and have strike belts for transferring ore directly onto the main decline shaft conveyor.

The company is also looking at exploiting the opportunity to expand its production from the world's second-largest known economic platinum resource.

Mr Sithole said the group is expecting global platinum market to remain in deficit in the short and medium term as steady demand growth exceeds growth in primary and secondary supply.

She said capital constrained supply growth and depressed margins are likely to continue at current platinum price levels.

"Our working inventory levels are currently lower than normal operating levels and will necessitate a re-stocking as production resumes and returns to normal," she said.

She said palladium demand is expected to increase this year, supported by global vehicle production growth and tightening emissions legislation, with growth in gasoline vehicle production in China remaining the dominant driver. Industrial demand, dominated by the electronics sector, is expected to remain flat in 2014.

Mrs Sithole said the reduction in primary supply as a result of the strike and the low levels of Russian stock sales should result in further deficits in the palladium market in 2014 and the near term.

She said there are a number of potential investors seeking access to the platinum industry and these are good long life assets with potential that will provide them with that access.

The company is set to prioritise capital spend and focus on Mogalakwena, Unki, Twickenham, Amandelbult and our JV assets - Mototolo, Modikwa, Kroondal and BRPM.

In November 2012, the Group announced the approval of the proposed 51 percent indiginisation implementation plan at Unki Mine by the Zimbabwean Minister of Youth Development, Indigenisation and Empowerment.

"The Group advises that the indigenisation plan has not yet been implemented and discussions around the indigenisation plan and its implementation remain ongoing. Stakeholders will be kept informed of any material developments in this regard."


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