HARARE: Zimbabwe’s largest platinum miner, Zimplats Holdings posted a $5,9 million profit from operations after royalties, a significant upturn from the $32,5 million loss in the quarter ended June 30, 2015. This was after the company recorded a 67 percent rise in revenue to $108 million in the quarter ended September 30, 2015 from the previous quarter, as it implemented a cost rationalisation strategy during the period to negate the effect of weakening platinum group metals (PGM) prices.
Management attributed the rise in revenue to the net effect of a 93 percent increase in 4E sales volume and a drop in metal prices during the period under review. As a result of the increase in 4E sales, direct operating costs were 24 percent higher from the prior period.
Cash cost per 4E ounce was down 32 percent from the previous quarter largely due to an 88 percent increase in 4E metal in converter matte production. This reduction was buttressed by a cost rationalisation exercise that was implemented during the period under review in response to waning metal prices.
The cost of platinum was down to $988 per ounce in the quarter just ended, compared to $1 127 per ounce in the previous quarter. Rhodium and palladium prices were also lower during the period. In terms of mineral production, the local platinum producer’s ore mined was up 10 percent from the previous quarter, which was because of an increase of 117 400 tonnes in ore mined from the open-pit operation.
Production from the underground mines increased by 32 900 tonnes compared to the previous quarter, although 4E head grade was affected. “The overall 4E head grade was marginally below the previous quarter due to the increase in the volume of lower grade open pit ore,” said the company. Meanwhile, Zimplats said the Bimha Mine re-development project “is progressing well and the mine is on schedule to reach full production in April 2018 as planned.”
A total of 34 834 tonnes of concentrates were smelted in the quarter producing 133 505 ounces of 4E, 88 percent higher than the previous quarter. Zimplats said local spend (excluding payments to Government and related institutions) for the quarter decreased 4 percent to $44 million, while total payments to Government in direct and indirect taxes was flat at $7 million from the previous quarter.
The company said the implementation of the outstanding components of the Phase II expansion project remains on schedule for overall project completion in 2016, while work on the refurbishment of its mothballed base metal refinery is “progressing well”, and on target for hot commissioning mid next year.
Zimplats said part of its agreed indigenisation plan, that is, to sell a 10 percent equity stake in the operating subsidiary to the Zimplats Employee Share Ownership currently awaits approval by the Reserve Bank of Zimbabwe. “Once the RBZ approval has been obtained, the company will proceed with the implementation of the sale of the 10 percent shareholding to the ESOT.”
