Mimosa, govt in talks over platinum tax

HARARE - Platinum miner Aquarius Platinum Limited (Aquarius) — a 50 percent shareholder in Zimbabwe’s second largest platinum producer, Mimosa — is in talks with government over the official gazetting of amendments to export tax on un-beneficiated platinum.

In a statement accompanying the group’s financials for the half year to December 31, Aquarius chief executive Jean Nel said the group was negotiating on behalf of its associate Mimosa Mining Company (Mimosa).

The Aquarius boss said while government had confirmed that the 15 percent export levy on un-beneficiated PGMs/ deductibility of royalties had been deferred to January 2017, it was yet to be put in black and white.

“However, the subsequent Finance Bill and Finance Act of 2016 did not include the deferment. Management is continuing engagements to have the deferment gazetted in a Statutory Instrument that will give legal effect to the deferment,” the Aquarius boss said.

The platinum producer also noted that the 2016 National Budget was silent on the non-deductibility of royalties for income tax purposes.

“The proposal to render royalties payable by Mimosa non-deductible for income tax purposes was implemented with effect from the year of assessment beginning on 1 January 2014, and therefore impacted Mimosa from the start of the 2014 financial year on 1 July 2013.

“This position has remained in the 2016 national budget and hence Mimosa continues to provide for royalties on a non-deductible basis in its financial statements,” said Nel.

According to Nel, the financial impact of the non-deductibility of royalties for the six months ended December 2015 was $1,7 million, 50 percent of which is attributable to Aquarius.

“Negotiations are continuing with the authorities to confirm that the royalties are deductible for income tax purposes,” he said.

Mimosa’s revenue in the period under review slumped 13 percent to $46 million from $53 million, as volumes also decreased five percent to 638 652 tonnes.

“PGM production decreased by four compared to prior comparable period and by seven percent to 58 019 PGM ounces quarter-on-quarter

Head grade for mine jointly owned by South Africa’s Impala Platinum and Aquarius Platinum decreased by one percent to 3,63 g/t.

“Recoveries were consistent at 78,6 percent.  Stockpiles at the end of the quarter decreased by two percent to 133 219 tonnes,” group chief executive,” the Aquarius chief said.

Mining cash costs per PGM ounce at $772 was three percent lower quarter-on-quarter as gross cash profit margin for the period increased from four percent to seven percent.

Total capital expenditure for the second quarter amounted to $10,8 million, mainly incurred on mining equipment.

A total of 651 629 tonnes of ore were blasted for the quarter under review. The blasted tonnage represents a 2,7 percent increase compared to the previous quarter’s 634 396 tonnes.

“The milled tonnage for the second quarter at 638 652 Mt was five percent below the 671 507 Mt achieved in the previous quarter.

“Tonnes milled were lower in the quarter as a result of plant stoppages associated with the rainy season mainly lightning which often results in power dips as well as a breakdown of the plant mill motor,” Nel said.

At 79,1 percent platinum recovery was slightly less than the 79,2 percent achieved in the previous quarter.

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