The Sunday Mail
Business Reporters
ZIMBABWE’S platinum production boomed in 2023, exceeding half a million ounces for the first time, but miners are grappling with slumping global prices and are resorting to cost-cutting measures to stay afloat, The Sunday Mail Business can report.
For the first time, platinum production surged to a record 507 000 ounces (oz) last year, a 6 percent increase from 2022, driven by investments that boosted operational stability.
Zimbabwe has the world’s third-largest platinum group metals (PGM) resource along the mineral-rich Great Dyke, after South Africa and Russia. Several upcoming and expansion platinum projects valued at over US$8 billion are expected to position Zimbabwe as a global platinum powerhouse.
World Platinum Investment Council (WPIC), in its latest world platinum production report, said Zimbabwe’s output continued its steady increase, surpassing the 500 000 oz milestone for the first time.
“The country benefits from operational stability, mechanised mining methods, resulting in fewer safety stoppages, and stable workplace relations. The realisation of volumes from the commissioning of the third concentrator at Zimplats and the Unki concentrator debottlenecking project contributed to the record production,” WPIC said.
The country’s operating PGM mines — Zimplats, Unki and Mimosa — are majority owned by South African companies and have been involved in different expansion and new mine development projects at a time when commodity prices continue to weaken.
Zimbabwe’s largest platinum producer, Zimplats, says all major capital projects under execution are progressing according to plan as the group seeks to expand capacity.
Under its US$1,8 billion capital expenditure investment, Zimplats’ strategy involves the setting up of integrated projects, including the development of new mines; the expansion of the smelter; the construction of an additional concentrator, a base metal refinery, a sulfuric acid plant; and the setting up of a 110-megawatt solar power plant.
According to the WIPC, in the fourth quarter of 2023, Zimbabwe’s platinum output increased by 8 percent to 133 000 oz from 123 000 oz in Q4 2022.
“Zimbabwe’s quarterly production rose by an estimated 8 percent year-on-year, reaching an all-time high of 133 000 oz.
“All three of the country’s operations demonstrated year-on-year growth, with Unki accounting for the bulk of this through increased throughput and head grade,” reads the report.
Zimbabwe’s production is poised to maintain its “long-term stability, with minimal changes” expected on a year-on-year basis.
This growth rate indicates a positive trend in Zimbabwe’s platinum mining sector and highlights the country’s efforts to enhance its production capacity and output levels.
Karo Platinum Holdings is going ahead with the development of its platinum mine despite the falling PGM prices, with US$100 million already spent on mine infrastructure development.
The mining company’s project in Zimbabwe is an open-pit platinum group metals (PGMs) asset under construction at a projected cost of US$391 million for phase 1.
Country manager Dr Josephat Zimba said the project was being undertaken in the middle of a challenging environment, with PGM prices being the lowest in recent times, but they continue to count on the Government for support in many respects to get the project to completion. One of them is fiscal support.
“These are multi-generational projects with an impact in terms of the number of people employed and the quality of work that is being done here.
“The size and magnitude of the project require patience and fiscal support from the Government, as the project needs to follow through on all necessary requirements, inspections and procedures,” he said.
The company is developing an integrated PGM mine that will become one of the largest PGM assets in the country, producing 190 000 oz to 200 000 oz of PGMs on annually.
Anglo American Platinum local unit Unki Mine’s total PGM production increased by five percent to 243 800 oz last year from 232 100 oz in 2022.
The firm benefitted from the concentrator debottlenecking project completed in 2022. Unki’s debottleneck project, which was completed in 2021 and reached optimum production in 2022, was done at a cost of US$48 million, with the expansion targeted to increase throughput capacity.
Unki, 100 percent owned by Anglo Platinum America, has its operations on the Great Dyke in Zimbabwe, 60 kilometres southeast of the town of Gweru.
According to WIPC, the market for the metal is set for consecutive periods of market deficits, with an undersupply of 418 000 oz expected in 2024, following a shortfall of 878,000 oz in 2023.
While the nation celebrates a landmark record production in 2023, this has been overshadowed by the weakening global platinum prices.
Zimbabwe’s major platinum miners are reeling as softening global prices for the metal are eroding profits, forcing producers to put in place some cost-cutting measures such as retrenchments to stay afloat.
The price slump is attributed to a slowdown in global demand, particularly from the automotive industry, a major consumer of platinum.
The sharp decline in platinum prices has significantly impacted profitability and Mimosa Mining Company recently announced the laying off of 33 managers and the shelving of a US$100 million expansion project due to a 35 percent plunge in platinum prices since April 2023.
Industry reports suggest similar struggles at Zimplats, with cutbacks in spending and a potential reduction in local procurement.
Last week, Zimplats reported a 32 percent decline in half-year revenue for the period ending December 31, 2023, compared to the same period last year. Zimplats has attributed the drop to lower average US dollar metal prices during the period.
Despite the significant investments exceeding US$570 million over the past two years, Zimplats’ future projects are now in jeopardy. This includes US$300 million allocated in the current year alone for critical initiatives like new mine development, a concentrator plant, a refurbished base metal refinery (with an additional US$190 million planned), a solar plant, a furnace and an SO2 abatement plan.
Analysts say the sustained low-price environment could force Zimplats to delay or even scale back its investments.
Even new mining projects are facing challenges due to the global slump in platinum prices. Tharisa, a South African mining company, postponed the opening of its Karo Platinum mine in Zimbabwe. The mine was originally supposed to start production in July 2024 but the commissioning date is now June 2025.
Minerals account for a staggering 75 percent of the country’s export earnings, with platinum being the second-largest contributor after gold. The dependence on mineral exports makes Zimbabwe vulnerable to fluctuations in global commodity prices.
