Zimplats expansion forges ahead

HARARE - Zimbabwe Platinum Mines Limited (Zimplats) says it is forging ahead with its multi-million dollar expansion project targeted at boosting production by almost a 100 000 ounces in the next two years.

This follows the miner’s compliance with the country’s Indigenisation Act.

Last Friday, the platinum group metals producer — 87 percent owned by South African Impala Platinum (Implats) — gave up 51 percent shareholding in a $971 million deal. “Plans to complete our Phase II development remain on course. This will see us growing from a 180 000 ounce operation to producing  270 000 ounces by FY15,” Busi Chindove, Zimplats head of corporate affairs, told businessdaily.

Zimplats produced 187 100 ounces of platinum last year.

After signing the indigenisation agreement with the government, Zimplats said certainty had been restored and it felt secure to continue operations in the country.

Under the indigenisation deal, Zimplats issued a 31 percent stake to the National Indigenisation and Economic Empowerment Board (NIEEB), 10 percent to employees while another 10 percent was given to the Ngezi-Zvimba Community Share Ownership Trust.

The miner will vendor-finance the acquisition of the 51 percent shareholding by locals.

Zimplats’ future had been bleak following rejection of its initial indigenisation proposal by government.
“We have completed what possibly ranks as the largest ever empowerment transaction in Zimbabwe,” said Implats chief executive Terence Goodlace.

Implats had committed to the expansion of its Ngezi operation expansion, but had been delaying implementation due to ‘‘uncertainty’’ surrounding its future and depressed platinum prices.

In 2011, Indigenisation minister Saviour Kasukuwere threatened to cancel Zimplats’ mining licence, accusing the platinum group metals producer of defying the empowerment law by offering ‘‘unacceptable plans.”

“We have taken the position to deem them (Zimplats) non-compliant in terms of provisions of the Indigenisation Act. We will now contact the Mines ministry with a view to initiate the process to revoke the operating licence of Zimplats,” Kasukuwere was quoted as saying then.

The Australian Stock Exchange-listed mining giant last year signed an “in principle agreement” to transfer 51 percent shares to locals.

Zimplats, however, submitted a revised compliance plan to the government late last year, giving provision for the payment of its proposals.

Zimplats has a market value of approximately $1 billion.

While analysts argue Zimbabwe’s indigenisation programme has scared away investors, Kasukuwere said compliance by all the major mining companies operating in the country “displayed the remarkable investor confidence in Zimbabwe as some companies have committed to expanding their operations after compliance with the empowerment policy.” - Eric Chiriga, Business Editor

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