Zimplats profits slump

HARARE - Zimbabwe Platinum Mines Limited (Zimplats) recorded a 66 percent slump in operating profit to $22,5 million in the quarter ended June 30, 2013 due to lower sales volumes and depressed metal prices.

The platinum group metals producer (PGMs), led by chief executive Alex Mhembere, said revenue declined by 26 percent to $126 million during the period under review.

The miner, which registered a $65,3 million operating profit in prior comparable period, said operating costs remained unchanged at $103 million.

This comes as most resources firms operating in Zimbabwe, such as Toronto Stock Exchange-listed gold miner New Dawn Mining Corporation and Bindura Nickel Corporation have had to employ cost-cutting measures due to declining international metal prices.

In the quarter to June, platinum price was 10 percent lower than in the previous quarter, while palladium and rhodium prices were four percent and two percent down respectively.

Operationally, June was a good quarter for Zimplats, with mined ore and milled tonnage rising.

The Impala Platinum Holdings Limited (Implats) subsidiary increased underground output by two percent to 1,23 million metric tonnes though the grade dipped to 3,26 grams per tonne of PGMs from 3,34 grams per tonne.

Ore milled rose by a third to 1,4 million tonnes.

The Australian Stock Exchange-listed miner increased metal-in-concentrate production by a third to 124 782 ounces.

Zimplats converts this to a matte, which it sends to Implats refinery in Springs, South Africa, to extract the metal.

The ounces in converter matte fell slightly to 124 237 ounces, while sales of this product were down nine percent to 118 416 ounces.

“Metal in concentrator matte was two percent lower than the previous period as metal in concentrate stockpiled in the first half of the year due to the furnace fire, was smelted in the third quarter,” Zimplats said.

Zimplats — 87 percent owned by Implats ? paid $30 million to the government in direct and indirect taxes, six percent lower than the previous quarter due to a reduction in corporate tax payments arising from the lower metal prices.

The company’s local spend (excluding payments to government and related institutions) increased from $42 million or 57 percent of total payments to $49 million or 66 percent of total payments in line with the company’s commitment to the development of local industry.

The Ngezi Phase II concentrator plant was successfully commissioned in April 2013.

Consequently, ore milled and metal in concentrate production were increased by 34 percent and 31 percent from the previous quarter respectively.

“Development of the new underground mine (Mupfuti) remains on schedule to reach full production in early 2015,” said Zimplats.

In January this year, Implats concluded a non-binding term sheet with the Youth Development, Indigenisation and Empowerment ministry for the sale of a 51 percent stake of its Zimbabwe subsidiary, Zimplats, to various indigenous entities for $971 million.

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