Zimplats in $20m loss


Zimplats says it will contract more open-pit miners to boost its output after it slipped to a $20.5 million loss in the second quarter to December from a $29 million profit in the prior quarter due to poor metal prices and low production after it shut down its biggest underground mine after one of its sections collapsed last July.

When Zimplats closed Bimha, it  projected that subsidence of the ground would cost the company 70 000 platinum ounces worth about $100 million. In December it said it had started redeveloping the mine, but warned that it would take three years to get back to the original footprint.

In a trading update today, the miner said mining and milling volumes had slumped by 15 and 12 percent in the quarter under review, leading the board to consider contracting more open-pit miners.

Revenue declined by 24 percent after an 18 percent decrease in gross revenue received per platinum group metals (PGM) ounce and a seven percent decrease in sales volumes.

Metal sales decreased by seven percent from 108 544 ounces in the previous quarter to 100 443 ounces.

“Financial performance was negatively impacted by lower production volumes, softer metal prices and the write-off of assets lost as a result of the Bimha Mine collapse,” said Zimplats.

“In an effort to further ameliorate the impact of closing Bimha Mine, the Board has approved the initiation of further contracted open-pit mining to supplement ore supply to the processing operations. Contractor mobilisation is currently in progress and first production is expected in the fourth quarter.”

The company also attributed the 21 percent increase in operating costs to the collapse at Bimha Mine and the loss of associated underground infrastructure.

It said $22.9 million was written off during the quarter, with an insurance compensation expected to offset the write-off.-The Source


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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