Mimosa plans $ 20m capex

HARARE - Zimbabwe’s second largest platinum producer Mimosa Mining Company (Mimosa) plans an at least $20 million capital expenditure in the next five years.

The miner — owned by Aquarius and Impala Platinum Holdings in a 50:50 percent joint venture — plans to ramp up platinum production by an additional 70 000 ounces from the annual average of 220 000 ounces.

Aquarius said it previously advised the Zimbabwean unit that it requires access to the Mtshingwe block to sustain Mimosa as a long life (20-year) asset.

“Incremental project capex for the project is estimated at $20 million (100 percent basis) spread over five years,” said Aquarius, which is dually-listed on the Australian and Johannesburg Stock Exchanges.

“Access was previously planned via a new decline shaft and related infrastructure at a cost of approximately $55 million (100 percent basis),”it said, adding that this thinking was revised and access is now planned via the existing shaft, by way of on reef development.

The main items included in the project capital expenditure are additional mill capacity, adding four fully equipped production teams and primary ventilation upgrade, among other things.

Jean Nel, the Aquarius chief executive, said “the project is very attractive from a returns perspective because effectively there’s 70 000 ounces of additional production at very little added fixed costs”.

He added that the project was evidently self-fundable at current projections for platinum-group metals prices.

Nel noted that the platinum producer was currently in negotiations with the Zimbabwean government over its indigenisation proposal.

“We really do have good relations in Zimbabwe,” he said. “The mine and shareholders’ boards will consider potential adverse changes in the country before making a final decision to allocate capital,” he said.

Zimbabwe, holder of the largest platinum group metals reserves after South Africa, passed a law in 2008 that compels foreign and white-owned companies with assets of more than $500 000 to cede majority ownership to black Zimbabweans.

Proposals to comply with the indigenisation laws submitted by local units of Anglo American Platinum Limited, Implats and Aquarius are yet to be agreed to.

This comes as Mimosa 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.

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