IMPALA Platinum has approved $1.8 billion (R29bn) in capital expenditure for its Zimbabwe unit, Zimplats, which would develop a new mine and expand production at existing portals.
Zimplats is a big investor in Zimbabwe’s mining sector, accounting for a bigger portion of the country’s platinum output. Implats also has an investment in Mimosa mine, which it jointly owns with Sibanye Stillwater.
The new capex vault for Zimplats formulates part of its capital investment strategy “over a 10-year period beginning in 2021” with about $1.2bn already approved for implementation.
The projects set to receive a boost from the new investment include maintaining current production levels through mine replacements and upgrades under which $516 million has been set aside, expansion of production levels through growth projects and development of a new mine.
This “will boost nameplate capacity from 6.7 million tons per annum to 8.8 million tons per annum and in-country processing capacity to 380000 tons of concentrate per year.”
This will be complemented by increased processing capacity. Platinum mining companies are under pressure from President Emerson Mnangagwa’s administration to kick in local beneficiation of the metals they produce in pursuit of value addition.
Zimplats will also invest in the establishment of an “abatement facility to mitigate sulphuric dioxide emissions emanating from the current and expanded smelting capacity” with about $969 million put aside for this.
“Refurbishing the mothballed base metal refiner to further beneficiate converter matte” will take up $100m while a further $201m will be put into a 185MW solar plant to augment power supplies.
“These projects are expected to be funded by internally generated resources,” Zimplats said.
This comes at a time when mining industry executives in Zimbabwe have bemoaned the impact of power outages on the industry. Zimplats and other miners in Zimbabwe have also been pushing that they be allowed to retain more of the foreign currency income they generate.
This is opposed to the current situation were a significant portion of the miners’ income is liquidated into local currency at the official exchange rate which lags the parallel market rate used by suppliers in their pricing.
In the quarter to the end of September, Zimplats spent a $400m “on exploration projects” while a further $1.1m had been committed for the same purposes at the end of that period.
The exploration activities included mineral resource evaluation, comprising approximately 8 621 metres of surface diamond drilling over existing projects on two mining leases. The exercise helps in keeping up with production schedules, it said.
BUSINESS REPORT ONLINE