Zimplats targets 280k platinum ounces

HARARE - Zimbabwe’s largest platinum producer, Zimplats, says it targets to increase production by 47 percent to 280 000 ounces next year up from 190 000 ounces recorded in the 12 months to June 30, 2015.

The group’s chief executive, Alex Mhembere, on Wednesday told analysts that the company had also concluded a power import deal with Mozambique’s Hydro Cahora Bassa (HCB), which is expected to increase the miner’s production and boost beneficiation work at the group’s base metal refinery (BMR).

“There will be no power hiccups at the BMR as we have already concluded a power deal with HCB. It is renewable and we expect the partnership to continue into the future,” he said.

According to reports, this deal will see the platinum miner importing about 80 megawatts (MW) of electricity directly from HCB of Mozambique.

Zimplats already has a contract running that allows it to import about 75MW of electricity through the Zesa grid from HCB, which expires in two years.

Mhembere said the group has also come up with a plan to refurbish and revamp its collapsed Bimha Mine.

“The board approved the redevelopment of Bimha Mine after extensive risk assessments had been done using two fleets in safe areas in the second quarter of the year with a view to ramp production back to design capacity in the second half of the 2018 financial year,” he said.

In the full year to June 2015, Zimplats’ mine extraction ratio for the period was down to 68 percent from 82 percent.

Mhembere said the $74,3 million loss recorded by Zimplats in the period under review was attributed to a surge in tax liability.

According to the Australian-listed miner, taxation for the year stood at $130,5 million — 314 percent higher than the previous year mainly due to the impact of two court judgments.

Revenue for the year dipped 29 percent to $408 million from $576 million mainly due to a 20 percent reduction in four elements (platinum, palladium, rhodium and gold) (4E).

A 12 percent fall in gross revenue per platinum ounce from $2 457 to $2 167 also arose from declining metal prices, while cost of sales at $316 million was five percent lower than the previous year’s $332 million.

“Gross profit margins deteriorated from 42 percent in prior year to 23 percent in the current year due to lower metal prices and the impact of lower production and sales volumes on fixed costs,” Mhembere said.

Administrative expenses for the year at $44,1 million were marginally higher than the $43,8 million reported in the previous year.

Operating cash cost per platinum ounce increased by 18 percent from $1 319 in the full year to June 2014 to $1 551 in the period to June this year mainly due to the impact of the lower production volumes on fixed costs.

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