Looming land grab still hangs over Zimplats

PROFIT in Impala Platinum’s unit in Zimbabwe is down despite a revenue and production increase as the company readies to bring back its collapsed Bimha mine in the country next year.

Zimplats, the biggest mining house in Zimbabwe, is however facing threats over a looming land grab after the government applied to the Administrative Court to pass the compulsory takeover of nearly 27 000 hectares of land containing platinum claims.

The company said profits for the quarter to the end of June plummet 28 percent to $30.2 million (R399.18m)compared to the preceding quarter compared to the $25.6m profit after royalties recorded during the corresponding period last year.

Zimplats said net operating costs for the quarter increased by 28 percent compared to the previous quarter, largely due to the 16 percent increase in sales volumes. Net “operating expenses for the previous quarter benefited from the $8m recognised in relation to the previously written off Reserve Bank of Zimbabwe debt”.

The company paid $3.5m in mineral royalties for the review quarter period, which is 11 percent down compared to the 2016 June quarter royalty payments.

Cash costs per ounce marginally increased by one percent to $620 while total payments to government in direct and indirect taxes increased to $51m from the $10m reported in the previous quarter.

In terms of production, Zimplats mined 11 percent more ore at 1.8 million tons at a head grade of 3.2 grams per ton against a recovery rate of 80.8 percent. Ore milled jumped 12 percent to 1.8 million tons compared to the 2016 June quarter.

“4E head grade, at 3.24g/t, was marginally lower than the previous quarter due to dilution from faults and barren geological intrusives in the areas mined during the quarter. Ore milled and 4E metal in concentrate produced increased by 18 percent and 17 percent respectively owing to an increase in the overall plant running time due to the extra nine days,” Zimplats said.

The company said it had lodged an objection to the proposed acquisition and was now locked in further negotiations with the government to “find an amicable solution”.