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Amplats' Zim unit may build $400m mine

The Zimbabwe unit of world no. 1 platinum producer Anglo American Platinum is considering building a new mine which could double production, its chief financial officer said on Friday.

But whether the project actually goes ahead will hinge on the results of a review Amplats' majority owner Anglo American is conducting into its platinum operations in the wake of violent strikes in South Africa and sluggish global demand.

File image: Reuters. Credit: REUTERS

The review is widely expected to lead to shaft closures and job cuts that could further anger its workforce.

Another worry in Zimbabwe, which after South Africa has the world's second largest known platinum deposits, is Harare's championing of a law requiring foreign-owned firms to surrender majority stakes in their Zimbabwean operations to local blacks.

“We are exploring various options to expand production, including building a new mine that could cost up to $400 million,” Colin Chibafa, the chief financial officer of Amplats' Zimbabwe unit, told reporters during a mine tour 335 km (200 miles) southwest of Harare.

Chibafa said production would “possibly double” after construction of the new mine. Output for 2012 is seen at 65,000 ounces.

Chibafa said supplies of electricity, which have hit mining operations in Zimbabwe, had improved after platinum miners helped the government power company pay $80 million owed to Mozambique's supplier Hydro Cahora Bassa of Mozambique.

In early November Amplats said it agreed to transfer a majority shareholding in Unki mine to locals following pressure from President Robert Mugabe's government. - Reuters

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