Zimplats retrench 67 in April

Zimbabwe’s top platinum group metals producer,Zimplats , terminated 67 employees in April, which is 1,6 percent of the total permanent workforce due to financial strain caused by a significant drop in global platinum prices.

In a memo dated 18 March, CEO Mr Alex Mhembere announced the initiation of a “voluntary retrenchment exercise for all interested employees.”

The objective of the program is to “avoid the need for mandatory retrenchments.” The company foresees that the subdued prices of platinum group metals will persist for the next 12 to 18 months.

Given this prolonged period of low prices, the company saw it fit to implement further cost-cutting measures.

In a quarterly report for the period ended March 31, the mining house noted that due to the decrease in metal prices, the management has taken steps to preserve cash which involve adjusting labor rationalisation and rescheduling capital projects within financial limitations.

“In April 2024, 67 employees, being 1,6 percent of total permanent workforce were retrenched.”

It noted that containment initiatives implemented in the prior quarter progressed in the period under review, resulting in a two percent reduction in total operating cash costs from the prior quarter.

“Operating cash costs increased by seven percent year-on-year, primarily due to the nine percent and seven percent increase in mining and milling volumes respectively, benefitting from cost mitigation efforts which helped contain the impact of persistent input inflation.

“Transfers from stocks to operating costs amounted to US$2,8 million during the period, in line with the movement in inventory across the value chain.”

Cash costs of metal produced increased by five percent and one percent from the comparative and prior quarter, respectively.

Operating cash unit cost of US$821 per 6E ounce was marginally below that of the prior quarter and declined by six percent year-on-year, benefitting from volume gains which offset inflationary pressures experienced on electricity.

The mining house noted that a total of US$340 million has been spent to date on the smelter expansion and SO2 abatement plant against a total project budget of US$521 million

A further US$27 million has been spent on the implementation of the 35MW solar plant project against a budget of US$37 million.

Added to that, a total of US$27 million has been spent to date on the execution of the Base Metal Refinery refurbishment project, against a total budget of US$190 million.

Mining volumes were unchanged from prior quarter but increased by nine percent year-on-year benefitting from the pillar reclamation operations at Rukodzi Mine and the continued ramp-up of production from Mupani Mine, which is under development.

Pillar reclamation activities also benefitted 6E head grade, which was two percent higher year-on-year.

The one reduction in grade from the prior quarter was due to an increased contribution of lower-grade Mupani Mine development ore and dilution from mining across geological structures.

Milled volumes increased by seven percent and three from the comparative and prior quarter, respectively.

It noted that a scheduled reline of the mills at the Selous Metallurgical Complex (SMC) was deferred to the fourth quarter of FY2024, the volumes from which also benefitted from improved milling rates and running time, in line with higher ore supply.

Concentrate recoveries were stable versus the prior quarter and increased by five percent from the comparative quarter, resulting in a two percent quarter-on-quarter and 14 percent year-on-year increase in the volume of 6E in concentrate produced. 6E metal in final product improved by 12 percent year-on-year and was one percent higher than the prior quarter.