Mimosa retrenches 137

HARARE - Zimbabwe’s second-largest platinum producer Mimosa Mining Company (Mimosa) — jointly owned by Aquarius and Impala Platinum Holdings — has retrenched 137 workers as part of strategies to contain costs.

The employees, 103 ordinary and 34 managers, were laid off under a voluntary retrenchment exercise, which had been on the cards since last year.

Aquarius yesterday said Mimosa implemented a rationalisation programme during the first half of 2014.

“The pre-tax cost of the programme was $5,5 million and a pay-back of less than 12 months is expected,” the miner said, adding that the reduction in Mimosa’s head count is expected to sustainably reduce the unit’s cost base.

Mimosa employs about 1 500 full-time workers and nearly 200 contract labourers.

The exercise comes on the back of analysts having said cost pressures exerted on the mining industry in the form of wage increases, high transport and electricity costs and depressed metal prices would ultimately impact negatively on employment.

Aquarius has engaged in a number of austerity measures to reduce costs since last year, putting in place a “range of initiatives designed to reduce operating costs and conserve cash resources during the present difficult operating environment.”

Market experts also said the development at Mimosa will negatively impact on the country’s economy by racketing up unemployment, which is hovering around 80 percent unofficially.

“By year end, unemployment would have topped 92 percent with most companies intensifying staff rationalising exercises… which is evidence of how gloomy the jobs data is going forward,” said research and advisory firm, Econometer Global Capital.

In the meantime, Mimosa’s revenue increased by 26 percent to $79 million in the quarter to June 2014 from $63 million realised in previous comparable period.
During the period, gross cash profit margin increased to 30 percent from 26 percent.

Production went up by nine percent to 648 944 tonnes, quarter-on-quarter, while stockpiles also increased to 165 000 tonnes. Volumes processed surged by 14 percent to 648 902 tonnes.

The local unit recorded a platinum group metals (PGM) basket price increase of four percent on average to $1 156 per PGM ounce quarter-on-quarter, down six percent.

Attributable production from Aquarius’ operations was up by four percent quarter-on-quarter to 33 500 ounces of which Mimosa contributed 30 409 ounces.

Year-on-year attributable production was one percent lower.

Mimosa’s cash costs increased by two percent to $908 per PGM ounce quarter-on-quarter, up by one percent compared to the previous year.

Aquarius’ chief executive Jean Nel said Mimosa delivered a credible production and cost performance despite the retrenchment exercise.

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