The world’s biggest platinum producer, Implats has revealed plans to increase output at its Zimbabwe subsidiaries including Zimplats by 100 000 oz to 260 000 oz by 2010, but would have to grapple with power and workforce shortages.

Implats

Implats has a majority stake in Zimplats Holdings Ltd, and a joint venture with Aquarius Platinum Ltd in Zimbabwe's Mimosa mine.

The expansions would boost output to 100 000 oz a year at Mimosa from 69 000 oz currently, and to 160 000 oz at the Zimplats operation, which produces 91 000 oz a year.

"Zimbabwe is a big blue sky opportunity," Brown said.

"The opportunity on the upside is enormous, but the investment climate is difficult -- any improvement in this would allow us to expand and inject further capital," he said in emailed responses to questions.

Zimplats has a long-term output target of one-million ounces.

"Power supply, skills and investment climate are big issues which cloud the horizon in Zimbabwe. Risks still exist, such as the infrastructure, which has degraded," Brown said.

"We have operated immensely well under inordinately difficult circumstances."

Implats has agreed with Zimbabwe's Electricity Supply Authority to buy power directly from third parties, and the firm said last October it would invest in a power sub-station to ensure steady supplies to its operations.

Earlier this month, Mozambique reconnected power supply to Zimbabwe only after Harare settled part of an electricity debt.

Zimbabwe, due to hold general elections late in March, is grappling with a severe economic crisis blamed on President Robert Mugabe's controversial policies, such as the seizure of white-owned farms to resettle landless blacks.

Implats' expects its production to fall just under 2 million ounces this year from 2.026 million ounces in 2007, hurt by a power shortage that has forced miners to curb electricity consumption to 90 percent of normal needs in South Africa.

A top Zimbabwean government official told Reuters earlier this month that his government would not force firms to give a stake to the government for free as had been previously feared, but would pay a market value for a 25 percent stake. The bill would be debated in parliament after the polls, he said.

The proposed mines bill follows the passing in September last year of a general bill giving 51 percent stakes in foreign-owned firms to Zimbabweans. That bill did not include a provision for a 25 percent government shareholding.

"There is unlikely to be further progress until after the elections," Brown said of the draft bill.

Zimbabwe says the draft mines bill would take into account credits towards the 51 percent local-ownership requirement for any mining firms that gave up some unused mining claims and invested in roads, power and other infrastructure.

Implats has said it has met most of these goals and is "well positioned" to win the credits and that, in principle, it supports the aims of localization.

---

Share This Story On:

Average user rating