Harare - Impala Platinum’s Zimbabwe unit, Zimplats, could be the shining jewel in the world number two producer of the precious metal’s chest, as it has swung back to profit and is about to start mining from a section of its collapsed flagship Bimha mine.
Zimplats yesterday reported a $7 million (R101m) profit for the year to June - a far cry from the $74m loss it posted in 2015.
Chief executive Alex Mhembere said the producer reversed the trend through increased production.
Implats will release its full-year financials today and it has already cautioned that headline earnings per share for the period will be between 56 percent to 75 percent lower than the previous year.
Sales volumes
Zimplats saw its run of mine production soar 26 percent to 6.6 million tons and milled 24 percent more ore at 6.4 million tons.
As a resultant, its platinum sales volumes surged to 290 000 ounces.
“We had challenges to do with platinum prices and so we had to focus on volumes.
“Despite loss of Bimha, we have managed to retain and deploy all our mining teams elsewhere,” Mhembere said.
The company, which employs 5 444 workers, reported a 16 percent rise in revenue to $471m, said Charles Mugwambi, the commercial general manager for Zimplats.
“The base metal refinery project has been delayed as a result of cash squeezes. We had to restrategise for the business to survive rather than grow it,” Mhembere added.
The company has already taken delivery of major equipment and components for the refinery project, such as cooling towers, air systems and crystallisation equipment.
Anglo Platinum, which operates the Mimosa mine in Zimbabwe, has also invested in a base metal refinery.
Mhembere said Zimplats had “reduced salaries for all employees”, with its management sector taking a 15 percent knock to their wages, while the other employees were taking a 5 percent salary reduction in addition to foregoing their salary raises.
Zimplats said it would continue to engage the government on implementation of its indigenisation compliance, which had heightened pressure on local producers to list on the Zimbabwe Stock Exchange as they were already required to retain 75 percent local content inside the country.
Although fund managers and analysts were of the opinion that Zimbabwe’s operating environment was tightening, Zimplats officials said the company had enough capacity to sustain its 2016 production levels of 290 000 ounces of platinum.
“The current production levels are very sustainable and we believe that we have the capacity to continue delivering on those levels,” Mhembere said.
Zimplats yesterday reported a $7m profit for the year to June - a far cry from the $74m loss it posted in 2015.
BUSINESS REPORT