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BizDay Zimbabwe

Platinum groups hit by Zimbabwe woes

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Harare – PLATINUM mining companies in Zimbabwe were this week scrambling to get out of fresh problems which saw miners at Mimosa protest the company’s retrenchment plans and the government moving in to ban exports of raw platinum to South Africa.

Zimbabwe has the world’s second largest platinum reserves after South Africa but is a small producer compared to other countries such as Russia which have significantly fewer reserves. The world’s major platinum miners; Impala Platinum, Aquarius Platinum and Anglo American Platinum all have significant operations in Zimbabwe.

President Robert Mugabe said at the weekend that the platinum miners should now be banned from shipping raw platinum outside Zimbabwe as a two year grace period imposed by former Mines Minister, Obert Mpofu had lapsed. Mimosa and Zimplats had not responded to written requests for comment by last night.

However, sources in the mining industry said yesterday that Mugabe’s announcement of the plan to ban platinum exports had come as a surprise to the platinum groups which are already undertaking a feasibility study for the setting up of a refinery. The joint refinery being planned by Unki, Mimosa and Zimplats is expected to cost as much as $2 billion.

“The government is pressuring the platinum miners. But there is no need for this because we are already planning a refinery for Zimbabwe,” said a mining executive.

State media quoted Mugabe saying at the weekend; “Let us close our doors immediately and say no raw platinum will go to South Africa.”

Mugabe added that Mpofu had given the platinum mining companies “two years and we must see them now arranging to build a refinery”.

Zimbabwe mining companies are also set to have their indigenisation deals reviewed against the backdrop of a tough operating environment in which the miners are paying higher mineral royalties.

The problems Zimbabwe mining companies are facing also worsened for Mimosa after employees expressed unhappiness over plans to retrench workers at the mine. Mimosa managing director, Winston Chitando justified the retrenchment exercise saying it was necessary as a cost reduction measure.

“With the volatility in the prices of platinum group metals and an upward trend in the industry cost base, Mimosa Mining Company has been focusing on optimising its own cost base.

One of the initiatives under this process has been the labour optimisation exercise which has been running for the past three years,” Chitando said in an emailed statement.

Although he said the retrenchment exercise would initially target about 100 employees, there are concerns among Mimosa’s employees that a significant number of workers could be retrenched in the future.

Pressure has been mounting on the platinum producers to set-up a refinery inside Zimbabwe to promote mineral beneficiation and value addition.

The miners have demanded that the government guarantee power supplies and also the creation of a conducive environment for the ramping up of output – currently projected at about 365 000 ounces for this year – to at least 500 000 ounces a year.

MEMORY MATARANYIKA

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