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Business Reporter
Tharisa Capital Plc says expenditure into the group’s Karo platinum project in Zimbabwe has reached US$131,3 million since June 2022.
A total of US$17,6 million of the expenditure was spent on exploration and predevelopment, the South African mining group said.
The group plans to invest US$391 million to complete phase 1 of the Karo project in Zimbabwe.
Tharisa initially targeted bringing the first ore to the mill by the second half of 2024, but the company extended the project timeline to June 2025 owing to deterioration in global platinum group metals (PGM) prices.
Platinum is Zimbabwe’s second largest single export earner and together with gold the precious metals account for more than three-quarters of the country’s annual shipments.
Key players include South Africa’s Impala Platinum-owned Zimbabwe Implats and Sibanye Stillwater (SA) co-owned Mimosa and the world’s largest miner Anglo American’s Unki Mine.
Several other projects are at various stages of development.
Zimbabwe’s mining sector was projected to grow to a US$12 billion economy by 2023.
Group chief executive, Mr Phoevos Pouroulis, in a statement of financials for the year ended September 30, 2024, said the bulk earthworks had been completed with civils for the concentrator halfway completed while major mechanical equipment had been fabricated, including mills and transformers.
“Constrained project debt capacity in the current low PGM pricing environment is requiring the group to evaluate alternative funding solutions.
“Senior debt and mezzanine facilities discussions are well advanced,” he said.
The Karo platinum project is an open-pit PGM asset under construction, located on the Great Dyke in Zimbabwe in Mhondoro, Mashonaland West Province.
Tharisa has a holding of 76,66 percent in Karo Mining, and with a commitment to provide further equity capital, Tharisa will increase its shareholding in the project to 80 percent.
Construction works for the plant commenced on December 7, 2022, and development continues steadily, with value engineering, mining, and process optimisation running parallel.
Mr Pouroulis said the fiscal regime with the Government of Zimbabwe necessary for a tier 1 project is being finalised.
“However, this and current commodity market conditions are impacting the funding workstreams and timeline for the delivery of this project.
“Accordingly, a measured decision was taken to slow the project timeline, continuing with smaller work packages, aligned with funding availability.
“But overall, the Karo Platinum project has progressed well despite the slowdown and smaller work packages have been completed on time and within budget,” he said.
Mr Pouroulis said while the delay in the timeline is a setback, it needs to be viewed in the context of a multi-generational project with a massive upside to the resource once phase 1 has been completed.
Tharisa plc is listed on the Johannesburg Stock Exchange (JSE) and the Main Board of the London Stock Exchange (LSE).
During the year under review, group revenue increased by 11 percent to US$4721,4 million compared to US$649,9 million in 2023, remaining resilient against the 28,1 percent decline in PGM prices and benefiting from robust chrome sales volumes with an uptick of 13,6 percent in chrome prices.
Other operating expenses increased by 15,9 percent to US$66,6 million from US$57,4 million in 2023.
The group said the largest cost component of other operating expenses was employee-related expenses of US$33,7 million, which contributed 50,7 percent to total other operating expenses.
Tharisa said total capital expenditure and commitments amounted to US$195 million, and of the total capital spent, US$24,2 million pertained to the mining fleet and US$164 million related to other mining assets.
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