Zimplats to benefit from R29bn capex

Business Reporter
ZIMPLATS is set to benefit from a R29 billion capital expenditure budget announced last week.
Implats announced on Thursday it would spend the R29 billion capex on its South African and Zimbabwean operations over the next four years.
Impala holds an 87 percent interest in Zimplats.
Implats chief executive officer Mr David Brown told a media briefing that part of the capex would be used to fund Zimplats’ Phase 2 expansion.
He said the Phase 2 expansion at Zimplats, a key part of Implats’ growth strategy, had started and was progressing satisfactorily.
Zimplats holds approximately two thirds of the Hartley Complex, the largest of the platinum hosting centres of the Great Dyke, making it a key platinum producer in the country.
Last year Zimplats initiated a US$445 million expansion project for the Ngezi Phase 2.
This includes the development of the Bimha Mine, consisting of a 2 million tonnes per annum (mtpa) underground mine, a 2 mtpa concentrator module, a 35 000-megalitre dam and, a nine kilometre ore overland conveyor and 1 125 employee houses.
Zimplats has since engaged Swedish supplier Atlas Copco for the supply of mining equipment worth US$26 million for the Ngezi mine.
Atlas Copco is an industrial group trading in compressors, construction and mining equipment, power tools and assembly systems. The order consists of 44 pieces of low-seam underground mining equipment, such as drilling rigs, mine trucks and loaders.
Delivery of the equipment is expected to start in March.
Implats has also said that Zimplats’ Phase 3 expansion, that is still in the pipeline, would not significantly affect the estimated R29 billion capex, as its funding would only be considered in the next five to 10 years.
Apart from Zimplats, the other part of the capex will fund development work at its flagship, the Rustenburg Mine, with a goal to ensure steady state production of a million ounces of platinum by 2014.
Meanwhile, Zimplats’ Bimha Mine increased production in the second half of last year, with ore mined totalling 2 037 000 tonnes, a 23 percent improvement on 2009.
Ore milled at 2 078 000 tonnes was 6 percent above the tonnage for the same period last year, reflecting the fact that for the same period last year, the Ngezi concentrator only operated at full capacity for part of the period.
4E metal production totalled 180 733 ounces, an increase of 10 percent on the previous year’s production in line with the higher throughput and recoveries.
Zimplats reported that metal prices realised during the half year were significantly higher than for the same period last year.
Accordingly, the combination of higher production and improved metal prices resulted in turnover for the six months of US$250 million, up 45 percent on US$172 million for the comparative period.
Operating costs for the period amounted to US$134 million, an increase of 30 percent on the previous year.
The increase was primarily driven by higher production volumes, increase in royalties in line with revenue and royalty rate adjustments, as well as increase in labour costs following conclusion of the 2010 wage negotiations.