The Sunday Mail
Business Reporter
Local platinum producers are considering pooling resources to construct a precious metals refinery in line with Government expectations for miners to add value and beneficiate minerals locally before export.
Mimosa Mining Company general manager, Mr Stephen Ndiyamba, told The Sunday Mail Business that platinum mining companies were seriously considering the plan.
Mimosa believes that it makes economic sense for platinum miners to put together financial resources to build in-country processing facilities, as opposed to going it alone since this was expensive.
“As you might know, there are other organisations that are currently looking at setting up smelters, and the discussions are at various levels – board and shareholder levels – to see how we can combine forces and also send our concentrates for in-country processing,” Mr Ndiyamba said.
He, however, ruled out the possibility of Mimosa setting up its own smelter, claiming the mine’s deposits could not generate returns to allow such an investment.
“What is left on the ground is 10 years on South Hill, and if we develop the North Hill shaft, we can get another 12 years. If you take a life of a mine of 22 years and invest US$100 million in a smelter, it’s not enough time for you to recover that investment.
“So, from a business point of view, you don’t then recover that capital investment,” he said.
Sending platinum concentrates to another company’s smelter, in which case the miner is only charged treatment fees, makes economic sense, he added.
Chamber of Mines of Zimbabwe chief executive officer, Mr Isaac Kwesu, indicated that “the miners are already smelting some of their platinum and sending it out as matte, but with more production, they would need to reduce costs by pooling resources (to build a refinery)”.
Discussions, he added, were already advanced as the plan was not new.
Most platinum producers currently export platinum in concentrate form, with only Zimplats beneficiating it to matte.
Analysts say the establishment of a refinery would significantly increase revenue from platinum since the country hosts huge platinum deposits.
The mineral presently accounts for at least 36 percent of the country’s total mineral output by value.
Zimbabwe has the second-largest platinum deposits in the world after South Africa and has been pushing mining firms operating in the country to build beneficiation facilities.
In 2015, the Government imposed a 15 percent tax on raw platinum exports to nudge companies to beneficiate the mineral locally.
The levy was later suspended after the miners agreed to a timeline to build local facilities.
In 2020, Treasury announced a new tax that was supposed to be effective early this year, but it was deferred to January 2023.
Platinum miners currently export the mineral largely in raw or semi-processed state to South Africa for refining.
The establishment of a platinum refinery in the country has become even more urgent considering that mining is expected to anchor economic growth under the National Development Strategy 1, which is expected to help achieve an upper middle-income economy by 2030.
Platinum is strategically important to the economy as it is one of the two minerals, including gold, that generate more than half the revenue from the mining sector.
Zimbabwe currently has three platinum mining companies — Zimplats, a unit of South Africa’s Implats; Mimosa Mining Company, co-owned by Implats and Sibanye Stillwater of South Africa; and Unki Mine, a unit of Anglo-American.
Other platinum projects are at various stages of development, including South African firm Tharisa’s fledgling Karo Platinum in Mashonaland West.
