Zim rains on platinum
Anything could happen for Impala Platinum
SOUTH AFRICAN PLATINUM producers say they’ll take a pragmatic approach to continuing problems in Zimbabwe, even though billions of rand have been pledged for investment there. “Zim is a place you take one month at a time, one quarter at a time,” says Stuart Murray, Aquarius Platinum CEO. “There’s no point in scenario planning.”
What’s quite extraordinary is that the dearth of platinum supplies has forced Impala, Anglo Platinum and Aquarius Platinum to invest in Zimbabwe, whereas similar investments elsewhere – such as the Democratic Republic of Congo, which is now emerging from a period of civil strife – would be deemed foolhardy.
Aquarius has a 50% stake in Mimosa, a small, highly profitable platinum company in Zimbabwe. About US$23m will be spent between Aquarius and its partner, Impala, expanding the mine.
But Impala’s far greater Zimbabwean exposure is through its 86,9% held Zimplats. It’s to invest $258m developing two underground mines at Ngezi in Zimbabwe. The decision to build the mines came after Impala signed an empowerment deal with the Zimbabwean government. In essence, Impala sold a third of its resources for around 30% empowerment credits.
The bombshell is that the Zimbabwean government is asking for 51% empowerment and wants foreign inves- tors to allow it to nominate suitable partners. The situation is potentially nightmarish but could change if speculation concerning President Robert Mugabe’s possible demise is to be believed.
A report in London’s Sunday Times (18 March) said Zimbabwe’s former army chief Solomon Mujuru was threatening to oust Mugabe. The International Monetary Fund has also turned up the heat on Mugabe, saying that the country’s parlous economic state must be solved or inflation could reach 5 000% by year-end.
Where that puts the indigenisation plan is anyone’s guess. David Brown, CEO of Impala Platinum, says agreements have to be honoured but Aquarius is largely uncommitted on its empowerment plans in Zimbabwe. “We don’t think the powers are at one on indigenisation,” Brown says. “And in the absence of proper legislation you’re just shooting in the dark. Obviously, we’ll comply with any laws enacted by a sovereign state.”
Meanwhile, Brown is preparing to “spring” employees from Zimbabwe if the country becomes more dangerous. “Quite clearly, the situation is volatile. Our focus will be on the safety of our employees. Our other concerns are quite standard: we want to ensure we can supply water, food, electricity… those kind of elements.”
Taking it one month at a time. Stuart Murray
Preparing to “spring” employees. David Brown