Zimplats only cash cow for Implats at the moment

Zimplats, the 87 percent-owned subsidiary of Implats, South Africa’s second largest platinum miner, is currently the only operation in the group that is producing platinum for sale, according to the South African daily, Business Day.

The paper said all the other mines had either been shut down because of a strike by the Association of Mineworkers and Construction Union or have been forced to stockpile their concentrate production because Implats’ Rustenburg smelter has been closed.

Platinum producers and the government of Zimbabwe are currently holding discussions about setting up a refinery in Zimbabwe. The government had given the miners a two-year deadline which expires this year but this is now being negotiated.

Zimbabwe insists that it is losing out by having platinum mined in the country refined in South Africa, an argument supported by industry insiders who argue that platinum ore has several other by-products which miners are not accounting for as refining is done in South Africa.

Zimbabwe imposed a 15 percent levy from January to force the platinum miners to set up a refinery in the country but the miners have complained that the levy is “punitive”.

According to Business Day Zimplats increased its production 58 percent to 115 200oz of platinum for the six months to the end of last December and contributed headline earnings of R246m from R73m.

“Zimplats is ramping up to an annual 270,000oz of platinum production rate, which has been put in place by the phase 2 expansion at a cost of $460m.

“The group’s much larger Impala division — consisting of all the major deep-level shafts near Rustenburg — increased refined platinum production 6% to 389,700oz but plunged into the red, recording a R171m headline loss compared with a R942m headline profit for the six months to December 2012,”the report said.

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