Zim miners facing uncertainty
WORLD number two platinum producer Impala Platinum (Implats) and other mining firms in Zimbabwe are facing increased uncertainty as executives in the crucial industry engage President Robert Mugabe’s government at a crucial Victoria Falls indaba.
Among the constraints that mining investors in Zimbabwe are facing are a placid regulatory framework, fiscal uncertainty, indigenisation, mounting fees and levies and other demands for increased contribution to the fiscus.
Commodity prices
On the international scene, firms such as Aquarius Platinum, Anglo Platinum and Rio Tinto, that are operating in Zimbabwe, are grappling with commodity prices that have remained low.
Implats has a significant exposure to Zimbabwe, as it controls Zimplats and is involved in Mimosa, a joint venture project it runs together with Aquarius Platinum.
Mimosa is a 110 000-ounce producer and executive chairman Winston Chitando says it The levy is likely to be removed in the next few weeks when Finance Minister Patrick Chinamasa presents his mid-term fiscal policy review. “continues to perform well” while Zimplats has had its output disrupted after the Bimha mine collapsed last year.
Officials at Implats said this week that the “real issue facing us now is uncertainty” emanating from “low metal prices, fiscal policy and security of tenure”.
Other mining executives in Zimbabwe said they were worried about the uncertainty that was characterising the southern African country’s resource industry despite investors maintaining a longer-term outlook on commodity prices that are currently depressed.
Zimbabwe had dangled a 15 percent levy on platinum miners to speedily set up a refinery in the country.
Sources said this week the levy was likely to be removed in the next few weeks when Finance Minister Patrick Chinamasa presented his mid-term fiscal policy review.
Levy
The sources said the 15 percent levy had principally been targeted (at) Implats, the biggest platinum mining investors in Zimbabwe, to act on its refinery plan although officials had argued that selective implementation of the levy would be problematic.
“The levy was principally targeted at Zimplats but it was argued that it would not make sense to implement it selectively. It was also realised that Zimplats would not be affected by the levy as it has already moved to refurbish its smelter facility while it already exports a semi-processed matte for final refinery in South Africa,” said a source.
Johan Theron, the spokesman for Implats, said: “It is imperative that we secure a development framework within the broader Zimbabwean socioeconomic environment that will not only allow Mimosa and its employees to reach their full potential, but in return also allow shareholders/investors to derive a fair risk adjusted returns.”
Aquarius Platinum said that platinum miners were engaging the government on implementation of the export levy.
However, spokesperson Charmane Russell said “any regulatory changes” should not undermine “the viability of the industry and its expansion”.
Mimosa is currently undertaking a feasibility to determine the viability of expanding the mine although the final decision would be the call of the mine’s board, according to both Implats and Aquarius Platinum. Implats said a plan to sink a second shaft at the mine had been shelved as a cheaper alternative had been suggested by the team undertaking studies at the mine.