Zimplats profits plunge

percent year-on-year to US$473 million as commodity prices suffered due to concerns over eurozone economies and surplus metal supplies.
The platinum-mining group’s chief executive, Mr Alex Mhembere, said while prices were coming down while costs were rising.
Major commodity markets such as the United States, China and Europe were either affected the by eurozone crisis or have surplus supply.
“This has been a difficult year for the mining industry, globally and Zimplats has been affected. We are operating in a depressed market, characterised by depressed metal process and surplus in supply. We are also faced with cash funding challenges and company closures, as we have seen in South Africa,” he said.
The 87 percent owned unit of Impala Platinum of South Africa’s extracts 4E metals, platinum, palladium, gold and rhodium. It also recovers iridium, ruthenium, silver, nickel, copper and cobalt, which all recorded increase in output during the period.
But the fall in profits came on the back of growth in output, as total ounces produced surged by 3 percent to 187 000oz while ore output increased by 8 percent to 4,5 million tonnes. 
The lower revenue inflows and profit and resultant cash constraints saw the mining giant’s borrowings increasing by US$26 million to US$66 million compared to the same period last year. But, in a demonstration of commitment to its investment Zimplats sunk in US$269 million into the Ngezi Mine Phase 2 expansion during the financial period under review.
The investment in the past year represents a 115 percent increased in capital expenditure compared to the same period last year.
On completion the expansion would result in additional 90 000oz capacity and take Zimplats annual output to 270 000oz.
Under phase 2 expansion Zimplats will develop another underground mine, Mupfuti, with full production expected by March 2015.
Concentrator and related infrastructure are scheduled to be commissioned by April next year while the tailings dam is also expected to be completed by end of next month.
A 30 000 megalitres dam will be constructed. Under the expansion programme 512 staff houses have already been completed.
The expansion programme is targeted for completion by 2015, but cash constraints and weaker prices could result in delays.
Zimplats spent US$247 million on local procurement while its remittances to Treasury grew by 129 percent to US$96 million.
It advanced US$25 million to power utility Zesa to clear part of its debt to Hydro Cahorra Basa of Mozambique. The mining firm said investment in community projects in areas it operates increased by 300 percent to US$5,4 million.
The country’s largest platinum extractor said its contract employees increased from 2 500 in the previous financial year to 6 000.
It reached seven million fatality free shifts, lost injuries declined by 50 percent while the lost time injury frequency rate declined by 72 percent in the last financial period.