With South African platinum production at an 11-year low, miners are looking to increase output in Zimbabwe to boost the sector in the face of strikes, stoppages and red tape in South Africa.
While the South African platinum sector has suffered, Zimbabwe’s has become the “anchor driver” of the country’s economy, generating up to $14 billion a year, according to Finance Minister Tendai Biti.
Anglo American Platinum (Amplats), the world’s biggest producer of platinum, is planning a new Zimbabwean mine in the wake of losing at least 170,000 ounces of platinum during a recent eight-week strike in South Africa, according to Business Day.
Amplats subsidiary Unki Mines’ chief financial officer Colin Chibafa said the new mine could double Zimbabwean output, producing 65,000 ounces of platinum a year. It could cost as much as $400 million.
Meanwhile, Impala Platinum (Implats) saw a surge in production in the first quarter from its joint venture with Mimosa Platinum, with increases in both tonnes milled and grade seeing production rise to 28,000 ounces.
“This remains in line with steady-state refined production of 100,000oz of platinum. Discussions are ongoing regarding Mimosa’s proposed indigenisation plan,” the company said.
Between them South Africa and Zimbabwe hold 75 percent of the platinum reserves, yet while labour unrest, high input costs, poor infrastructure and government intervention have damaged South Africa’s production, Zimbabwe is going strong.
Though the going has by no means been smooth in Zimbabwe, with miners forced to comply with an indigenisation policy as well as mine cost inflation, output has been ramped up regardless. Foreign companies have mostly complied with the indigenisation policies.
The Zimbabwean government has already given its approval to a proposal to give 51 per cent of the mine for compliance with the indigenisation programme, with the shareholding valued at over $300 million by the ministry. Economists, however, believe it could be worth even more given the “prevailing turmoil” in the South African platinum industry.