21 September 2017

Zimbabwe: Zimplats Embarks On Employee Wellness Programmes

Zimbabwe's largest platinum miner, Zimplats, is turning to health programmes to keep its employees well and reduce compensation and medical costs.

The group's chief executive officer, Alex Mhembere, said the company had engaged specialists to carry out an assessment of the mental health status of employees, with a view to supporting those requiring assistance.

Mhembere noted that occupational health monitoring for the full year to June 30, 2017 focused on occupational lung diseases -- mainly pneumoconiosis -- noise induced hearing loss and backaches.

"An ergonomic 9 and vibration survey was instituted in response to a rise in cases of backache mainly among mining employees and recommended remedial action plans are under implementation," he said an annual report released last week.

The Financial Gazette was reliably informed that close to 40 people at Zimplats' mines in Ngezi had retired in the past year on medical grounds, mainly due to low back pain.

Low back pain is particularly common among miners as their work requires repeated lifting of heavy burdens, vibrations, bending, twisting of the spine and prolonged standing.

They also carry heavy loads such as emergency oxygen devices and batteries suspended at waist height.

Low back pain results in enormous costs to industry, but data on this issue is sparse among miners and the general population in Zimbabwe.

Mhembere said Zimplats, which recorded zero fatalities and covered over six million fatality free shifts during the year, considers employee wellness and behaviour as key to safe production in the workplace and achievement of the group's 'zero harm' objective.

"We operate an inherently risky business, mining; there's nothing that matters to us most than the safety and wellbeing of our employees. We really won't mind closing our business for a week or months if that ensures our workers are safe," he told analysts last week.

Meanwhile, the Australia Stock Exchange-listed miner's revenue for the year increased by nine percent from $471,8 million in 2016 to $512,5 million during the year to June 30, 2017, despite a five percent decrease in 4E volumes from 582 833 ounces to 555 892 ounces.

"Revenue was supported by an increase in average metal prices as gross revenue per platinum ounce improved from $1 638 to $1 868," Mhembere said, adding that cost of sales decreased by six percent from $390,7 million last year to $367,1 million largely due to the five percent decrease in sales volumes.

Gross profit margins improved from 17 percent in 2016 to 28 percent in the reporting year mainly due to the improvement in average metal prices.

The Zimplats boss noted that operating cash cost per platinum ounce increased by two percent to $1 225 this year, from $1 197 in the previous corresponding period due to a nine percent decline in platinum production and an increase in prices of consumables.

Zimplats, which is 87 percent owned by South Africa's Impala Platinum Holdings, was awarded a 2,5 percent export incentive amounting to $14 million on the export proceeds received in Zimbabwe during the year compared to $1,1 million the company received last year.

In addition, the group also received Treasury bills with a total nominal value of $34 million from the government in settlement of the principal amount owed by the Reserve Bank of Zimbabwe.

The platinum miner, however, disposed the Treasury bills during the period under review for $20,8 million.

"As a result of these factors, profit before income tax for the year increased from $29,4 million in the full year to June 30, 2016 to $101,3 million," Mhembere said, adding that income tax expense for the year increased to $55,8 million in line with improved profitability from $22million the previous year.

Net cash generated from operating activities increased from $36 million in 2016 to $56,1 million, while at year-end, Zimplats had bank borrowings amounting to $109million and a cash balance of $70,3 million.

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