Harare - Cost-cutting measures implemented by Aquarius Platinum and Impala Platinum (Implats) at their joint-venture Zimbabwean operation have helped lower costs by 9 percent.
Implats and Aquarius jointly own the Mimosa mine in Zimbabwe.
The mine continues to face financial and shareholding uncertainty stemming from tax liabilities, the indigenisation ownership threat and royalty payments.
These issues have affected Mimosa’s financial performance, especially at a time when platinum mining companies are battling low precious metal prices and subdued demand from world markets.
Revenues from the Zimbabwe operation rose from $130.5 million (R1.8 billion) in 2014 to $136.6m this year.
Cash costs for the Zimbabwe operation declined by 9 percent, “demonstrating the impact of the cost-saving initiatives implemented in the 2014 financial year”, with cost cutting likely to remain a point of focus given the ongoing low metal price environment.
The uncertainty that Implats and Aquarius Platinum are facing in Zimbabwe came as the southern African country, already being shunned by international investors, scored worse in competitive rankings by the World Economic Forum (WEF) this week.
Troubles
Zimbabwe, rich in mineral resources but unable to spur its economy out of the current economic troubles, slipped one place to 125 out of 140 in the WEF competitive index.
“Access to finance remains far and away the main problem, followed by policy instability and restrictive labour regulations,” said the WEF report regarding the state of Zimbabwe.
Jean Nel, the chief executive of Aquarius Platinum, said this week the Zimbabwean mine had been hobbled by export levy and royalty uncertainties.
He said “an attributable amount of $4.5 million has been accrued for the year ended June 2015” as a result of the government’s failure to clarify a 15 percent tax on exports of unbeneficiated platinum.
Aquarius Platinum said: “In the absence of the formal deferment in law, and having considered the above, the directors believe it is prudent to provide for the impact of this levy as the company continues to engage the government.”
Flight
Mimosa is among the foreign-owned mines in Zimbabwe that the government wants to cede 51 percent majority shares into the hands of black Zimbabwean groups under a controversial indigenisation policy that has been blamed for a massive investor flight that has hit the country.