Zimplats granted approval to continue operations
Zimplats is Zimbabwe’s top forex earner by entity
Zimplats parent, Impala, mothballed its plants due to SA lockdown
As the country tries to find a balance between economic stability and the nation’s healthcare in the face of COVID19, Zimplats has been granted a waiver to keep on producing despite national lockdown.
Zimbabwe went into national lockdown on Monday following the declaration of coronavirus and its subsequent rapid spread globally as a national emergency. The virus has spread to 151 countries across the world including Zimbabwe and has infected a total of 1 million people, claiming 50000 lives.
Almost the entire globe is in effective lockdown as counties try to flatten the infections curve. No cure has yet been found for the virus but a number of vaccines are under tests in different countries. Social distancing and extreme hygiene such as washing hands frequently is seen as reducing the spread of the virus, leading to strategic globe wide lockdowns.
Zimplats is Zimbabwe’s top forex earner by entity, accruing over half a billion dollars in forex revenue per annum earned through the mining of Platinum Group of Metals which include Platinum, Palladium Rhodium and Gold among others.
It therefore remains the biggest contributor to the national fiscus by value as well the highest earner of forex, making it a strategic entity in the scheme of Zim economics.
Employees at the company confirmed that production is ongoing and that military are manning the mines to control movement to and from the mine, essentially all working on the mine are not allowed to leave.
In an announcement to shareholders published on the ASX, the company however said it hold the health of its employees in highest regard and that it is following agreed measures to minimize the risk of infections spread within the operating mines.
Despite this, parent, Impala in South Africa whose refinery is used in the processing of ore extracted from Zimplats, has temporarily mothballed its plants due to the SA lockdown.
South Africa has put a blanket lockdown on all mines including several businesses which are considered as providing non essential services and goods.
This means even if Zimplats maintain production the ore cannot be transported to South Africa for processing into final products. It however could be a strategy that once SA lifts the lockdown, ready ore from Zimbabwe can cover the SA shortfall as production resumes.
Inspite of all these cushioning efforts, it is likely that Zimplats sales volumes for the quarter and subsequently for the year, will be impacted negatively.