No compromise on platinum miners

Business Reporter
Government will not compromise on its position requiring platinum miners to set up a local refinery and wants mining firms to take hard short-term decisions for future benefit.
Mines and Mining Development Minister Walter Chidhakwa said mining firms are investing for long and short-term gains at a time Government has identified mining as the centrepiece of economic growth in the short to medium term.

The thrust falls in line with the African Union vision’s that the mining sector should contribute more to socio-economic growth of the continent than it has ever done in the past.

As such, Minister Chidhakwa said it made business sense to start building a refinery now than wait for the “appropriate” economic conditions with regards to level of output and power supply.

Zimbabwe currently has three productive platinum mines namely Impala Platinum’s Zimplats, Implats and Aquarius’ Mimosa Mining Company and Anglo Platinum’s Unkie Mine.

Minister Chidhakwa said mining companies made a conditional commitment to establishing a refinery when they said they would build the facility if it makes economic sense.

Dismissing the platinum companies’ argument that Zimbabwe needs to build critical mass first and ensure adequate supply of power before establishing a precious metal refinery; he said the companies must look into the future.

“The question is do we have the will? I know you will say if it makes sense it will be done and I want to say to you it makes business sense.
“I think you place yourself in business over 20-30 years. In future it will make business sense,” Minister Chidhakwa said.

Against this background, Minister Chidhakwa said Government would soon undertake a due diligence of the two companies it has short-listed to set up a precious metal refinery.

“We have short-listed two; we will visit the countries of the two companies that we have short-listed. We will do with due diligence.”

The minister was speaking ahead of a beneficiation conference scheduled for Victoria Falls from February 27 to 28, 2014 to explore ways of how to maximize the mining sector contribution to economic development in Zimbabwe.

Further, the conference will explore the extent of mineral beneficiation in Zimbabwe and the scope for further beneficiation and value addition of the country mineral stock.

Zimbabwe produced 430 000 ounces of platinum last year, but the Chamber of Mines of Zimbabwe says output of about 500 000 is required to justify a refinery in the country.

The Chamber also has concerns about power supply with the country only able to generate about 1 200 megawatts against national demand for power of 2 200MW.

However, Minister Chidhakwa said since the process of refining platinum required certain expertise and technical know-how, which will see locals acquiring such requisite skills.

He said Government also believes that the only way it can develop the economy was if the country valued added its minerals to maximise the returns from export of precious metals.

Further, the minister said since refineries had hitherto been confined to foreign countries, it was time that similar facilities were built in the country, which is a major producer.

In efforts to make sure platinum miners establish a local refinery, Government introduced a 15 percent levy on unbeneficiated platinum effective January 1 2014 and plans total ban on exports of the metal by the end of this year.

But the minister said Government was aware that the local platinum firms were becoming uncompetitive due to the depreciating South African Rand and Government would keep monitoring the situation to make sure they remain viable.

As the Government presses ahead with efforts to maximise the contribution of mining to the economy, Government will taken action on undeveloped platinum claims.

“Government issued claims, Special Grants issued to three or four other players and there is nothing happening,” he said.

“But if look at exploration reports there are very encouraging, very rich resource, but they are not doing anything.

“We are very unhappy about that. Our people are expecting jobs from these companies.

“We are not acting now because we want to make sure that when we act we will be legally proper, we will act very soon,” the minister said.