New levy shocks Zim miners
JOHANNESBURG - SOUTH African platinum miners in Zimbabwe have sunk back into uncertainty as the government insists on the implementation of a 15percent levy on unprocessed platinum exports next year.
Anglo Platinum, Sibanye Gold and Impala Platinum said this would put a major financial strain on their bottom lines . This week Implats reportedly threatened to shut down its Mimosa co-owned mine.
Economist Vandudzai Zirebwa said Implats and Sibanye were in a “very tricky” situation regarding the beneficiation aspirations of Zimbabwe. “Surely you cannot operate on a loss position? However, communities and government need also to benefit from such huge operations.
"There is a need for information-sharing and dialogue between the involved parties before such drastic measures (as closing down the Mimosa mine) are taken,” said Zirebwa.
Sources privy to deliberations on the issue told Business Report that tensions had been boiling amid growing frustrationabout the levy, with Implats charging that its investments were not being fully appreciated. “The Implats board has discussed the issue at great lengths and there is a feeling that the 15percent levy will be a major drain,” said one source.
Gerhard Potgeiter, group executive for growth at Implats, was quoted as saying the levy had occasioned a “crunch time” for the company. “We would rather park the resource than post losses,” he said.
The argument on the part of President Robert Mugabe’s government is to drum up job creation prospects and value addition through full beneficiation of metals mined in the country. Pressure on the issue is likely to ratchet up ahead of elections scheduled for next year, in which Mugabe will seek a fresh mandate to further rule Zimbabwe.
Zimplats is reportedly safe from this as its beneficiation value chain is ahead of Mimosa and Unki. Zimplats runs three concentrators in Zimbabwe that produce a concentrate that is then fed into a smelter and a converter that produces a white matte which is then taken to South Africa for final refining. “Responding to the pressure in terms of beneficiation, we looked at opportunities for establishing a greenfield smelter but that was a pie in the sky,” Alex Mhembere, chief executive officer of Zimplats, said.
The company also explored an opportunity “to work with Bindura Nickel Corporation on the Selous Base Metals Refinery. It has capacity to process 90000 platinum ounces and equivalent” in nickel. This still remains an option in terms of truncating the beneficiation process like having nickel removed from platinum at the Bindura refinery or at Empress Nickel Refinery, which is owned by RioZim.
However, executives in Zimbabwe’s platinum mining say capital constraints have seen projects on refineries put on the back-burner.
- BUSINESS REPORT