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Nelson Gahadza
Senior Business Reporter
Zimbabwe’s leading platinum producer, Zimplats’ 6E (six elements) production for the half-year to December 31, 2022 increased by 6 percent to 300 738 ounces mainly due to the positive impact of the introduction of the third concentrator module.
The six elements (6E) are platinum, palladium, rhodium, gold, ruthenium and iridium.
Mr Alex Mhembere, the group’s chief executive officer, said ore mined during the period increased by 9 percent to 3,8 million compared to the same period last year, driven by mine upgrades.
“This was mainly due to increased production output at Bimha and Mupani mines. Bimha Mine has been upgraded from 2,5 metric tonnex per annum (Mtpa) to 3,1 Mtpa, while Mupani budget production output has increased from 0,4 Mtpa to 1,1 Mtpa,” he said in a production update.
Tonnes milled increased by 9 percent compared to the same period last year at 3,4 million. Mr Mhembere said 6E head grade at 3,39 grams per ton (g/t) was marginally lower compared to 3,41g/t achieved in the same period last year due to increased contribution of ore from lower grade mines.
For the period under review, the group declared an interim dividend of US$100 million. The group’s revenue at US$545,5 million was 7 percent lower than prior period largely due to lower sales volumes with actual 6E ounces sold at 291 751 against 322 752 ounces in the prior period.
Mr Mhembere said the prior period benefitted from the sale of matte produced and stockpiled due to the administrative delay in the export of matte towards the end of the previous financial year.
Cost of sales was 7 percent higher at US$315,6 million compared to the same period last year figure of US$294,9 million.
“Consequently, gross profit margin was 42 percent, an 8 percent reduction from 50 percent achieved in the same period last year mainly due to the impact of higher than budget operating cost per 6E ounce in the current period,” he said.
Mr Mhembere also highlighted that depressed average US$ metal prices also had an adverse impact in the current period.
Cash operating cost per 6E ounce produced at US$822, increased by 17 percent from the US$707 reported in the same period last year.
“This was driven by inflation-related price increases on major consumables, 42 percent power tariff increase with effect from October 2022 and increase in intermediated money transfer tax (IMTT) charges from 2 percent to 4 percent.
“Resultantly, profit before income tax for the period at US$221,5 million was 15 percent lower than US$261 million recorded in the same period last year.”
Mr Mhembere said the development and upgrade of Mupani mine which replaced Ngwarati, Rukodzi and part of Mupfuti mines is on schedule.
He said Mupani mine targets 3,6 million tonnes per annum in August 2028 a total of US$225 million had been spent on this project as at December 31,2022 against an approved project budget of US$386 million.
Mr Mhembere said the upgrading of Bimha mine as part replacement of Mupfuti mine is progressing well having achieved nominal production of 3,1 million tonnes per annum.
“The outstanding scope to sustain capacity targets completion in the first quarter of FY2024. A total of US$51 million had been spent on this project as at 31 December 2022 against an approved project budget of US$82 million,” he said.
The group’s third concentrator plant at Ngezi was successfully commissioned in September 2022 and ramped up to nameplate capacity in October 2022.
Mr Mhembere said a total of US$97 million had been spent against an approved budget of US$104 million as at 31 December 2022.
“The remaining relates to process optimisation and financial close out.” The smelter expansion and sulphur dioxide (SO2 ) abatement continued implementation with on-site construction and offsite manufacturing of equipment.
Mr Mhembere said the refurbishing of the mothballed base metals refinery (BMR) was approved by the board in November 2022 with an authorized capital budget of US$190 million and approved completion date of October 2025.
The BMR targets a capacity of 5 200 tonnes of nickel equivalent to current production volumes.
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