Amplats keeps faith with high-riding Zimbabwe operation
ANGLO American Platinum (Amplats) is keeping faith with its Zimbabwe operation, which it now deems as integral to its portfolio after disposing of some assets in South Africa, with the company saying yesterday that the Unki mine had reduced costs and raised production.
Amplats is the global number one miner of the metal, while Impala Platinum and Sibanye Gold are the other platinum operators in Zimbabwe – which has the second largest reserves of platinum in the world.
Unki mine’s revenues for the interim period to June 30 had, however, slightly fallen from R1.103 billion to R1.038bn.
The decision by Amplats to retain Unki as an integral operation comes against the backdrop of relaxation of Zimbabwe’s indigenisation policy by President Robert Mugabe.
Anglo Platinum said after divesting out of some of its operations in South Africa, its “retained portfolio” would consist of Unki, Amandelbult, Mogalakwena and other joint venture and associate operations in South Africa.
Zimbabwe now requires that existing foreign mining groups spend 75 percent of their earnings in Zimbabwe instead of mandatorily ceding 51 percent shares to black local groups.
The new portfolio for Amplats, which includes the Unki mine, is earmarked to yield low costs for the platinum giant.
Unki has been delivering a low cost profile. Anglo said yesterday: “Cash operating costs at Unki decreased 6 percent to R881 million. The decrease was driven primarily by the rand strengthening against the dollar by 14 percent as Unki is a dollar denominated operation.”
The cash operating cost base for the Zimbabwean mine declined by as much as 12 percent to R22 848 per ounce owing to “improved production and lower” rand costs.
In terms of production, output from the Unki mine for the half year period increased by 5 percent to a high of 38 400 ounces. This was driven by a 3 percent surge in tons milled and a 2 percent rise in the head grade to 3.48 grams per ton.
The higher grade per ton was achieved from a “better mining reef cut, which reduced waste mining, resulting in higher grade ore being delivered to the concentrator”.
It is expected that Unki will produce 75 000 ounces of platinum this year.
Platinum miners in Zimbabwe have been enhancing production even despite mod- erate improvements in the global platinum price, although analysts say miners continue to rationalise capital investment.
Miners have also been demanding that the government restore certainty to the operating framework.
Despite this, platinum export earnings by South African platinum mining groups in Zimbabwe surged to $333.5m (R4.3bn) for the period January to May 12, 2017, significantly up from the $282m recorded for the same period in 2016.