Zimplats shuts key operation for revampComment on this story
Harare - Impala Platinum (Implats) would have to re-engineer Bimha, its biggest mine in Zimbabwe, the second-largest producer of the precious metal said yesterday.
The news comes after its Zimplats unit announced that it had completely shut down the Bimha mine, which had partially collapsed last month and halved production, plunging into uncertainty its plans to ramp up output.
Zimplats is a crucial operation for Implats, which has faced headwinds from labour unrest at its main South African operations. Implats had approved an expansion project for Zimplats, which would have taken its production in Zimbabwe to 270 000 ounces a year in the next few years.
Zimplats said it produced 240 000 ounces of platinum in the last operating year. Implats will release results for the year to June on August 28.
Implats said yesterday that the closure of Zimplats’s biggest mine was not expected to undermine its production ramp-up targets in Zimbabwe. The Bimha mine closure would, however, “unfortunately impact when and how we reach our production target of 270 000 ounces”.
Zimplats operates three other mines, with mining teams from the Bimha mine now deployed at these mines.
Johan Theron, a spokesman for Implats, said yesterday that it was still too early to determine whether further funding would be required to improve the mining ground conditions, which continued to deteriorate. But he confirmed that the company would have to re-engineer the mine.
“We are continuing to monitor the situation at Bimha mine and have commissioned detailed technical studies to re-engineer and/or arrest the situation at Bimha mine,” Theron said.
Zimplats chief executive Alex Mhembere said yesterday that the Zimbabwean mining house had ceased “all mining operations at the Bimha mine with immediate effect” to keep miners and equipment safe.
The mine had partially collapsed last month after ground conditions, which the firm was aware of and was evaluating, deteriorated. This was caused by a major fault line in the area, Mhembere said.
Zimplats had closed half of the mine after it collapsed and transferred some of the working teams to its other mines. Initially, Zimplats had estimated that it would lose 9.5 percent of its annual production target of 240 000 ounces for the year to June 2015.
“Over recent weeks, ground conditions have continued to deteriorate and, as a consequence, it has been decided to withdraw employees in high-risk areas with immediate effect and to implement orderly closure procedures across the rest of the mine,” Mhembere said.
The total closure of the mine now posed a significant threat to Zimplats’s production as it would lose about 70 000 ounces.
However, production from its three other mines in the country, which apparently were in close proximity to Bimha, was “not expected to be affected”.
Theron explained: “On an absolute and relative basis, the impact [of the closure of Bimha mine] is clearly significant.”
Sources at Zimplats said significant additional funding would be required to bring the mine back into operation. They added that this process could take more than three years.
“To a large degree, the technical studies will also explore further mitigating strategies, over and above specific challenges at Bimha mine,” Theron said.
Zimplats intended to revamp its platinum refinery in Selous, a few kilometres from the capital, Harare, in the next two years. However, Implats was yet to approve a second phase of the refinery upgrade, which would require capital expenditure of about $500 million (R5.3bn).
As part of its efforts to ramp up production, the firm was developing a new mine, called P5, which would replace two current mines whose resources would be depleted by 2019.
Mhembere said last month that the 15 percent levy on unprocessed platinum that the government of President Robert Mugabe had threatened to implement early this year had not yet been enforced.
“No, it has not been implemented; it is supposed to take effect in January 2015,” he said.
Zimbabwe has the largest reserves of platinum after South Africa. Other giant platinum groups such as Anglo American Platinum and Aquarius Platinum, which operate the Unki mine and the Mimosa mine, respectively, have a significant presence in the country.
Shares in Implats lost 4.49 percent to close at R105.35 on the JSE yesterday.