- 6E production rose by 5%
- This was due to third concentrator’s commissioning
- However, challenges remain
Harare- In the realm of platinum group metals (PGMs), Zimplats Holding Limited, a distinguished industry frontrunner has reaped benefits involving the commissioning of the third concentrator during the first quarter of 2023, yielding remarkable dividends evidenced by a noteworthy upswing in 6E production. According to a trading statement for the year ended 30 June 2023 released by the parent organisation, Impala Platinum Holdings Limited (Implats or the Group), the Company has observed a discernible 5% escalation in 6E matte production, culminating in a substantial tally of 611,000 ounces.
This favourable outcome can be unequivocally ascribed to the strategic implementation of the concentrator, forming an integral component of a comprehensive investment initiative endorsed by the board and shareholders of Implats, the esteemed parent company. With a substantial fiscal commitment amounting to a staggering US$1.8 billion, this enterprising investment is poised to usher in a momentous transformation, effectively bolstering Zimplats' production capacity. As a direct consequence of this visionary endeavour, the anticipated result is an exponential surge from the current production volume of 2.4 metric tonnes per annum to an impressive 4.2 million metric tonnes per annum.
Remarkably, the Group has reported a rachievement in attaining a 6E matte production of 611,000 ounces, despite encountering certain challenges such as lower-grade deposits and regional power disruptions. It is worth noting that the Zimbabwean national grid was severely affected by loadshedding in March 2023, while intermittent power outages further impacted operations at the Mimosa facility in May and June.
Given the circumstances, the Group estimates that approximately 36,000 ounces of 6E production were regrettably forgone across the managed and joint venture operations in southern Africa during the specified period. Out of this total, 28,000 6E ounces can be attributed to Impala Rustenburg operations, while the remaining 8,000 6E ounces are attributable to the Zimbabwean operations. These challenges have undoubtedly influenced the overall production performance within the southern African region.
The mining industry, which heavily depends on a substantial electricity supply, is currently grappling with intricate power challenges that have led to a significant reduction in productivity. In response to these challenges, the Group has undertaken measures to manage the lower stages of load curtailment during the period under review. This has involved implementing power reductions to the furnaces and concentrators within their operations. However, as the load curtailment escalated to higher stages, the mining and hoisting volumes were unavoidably affected.
Unfortunately, as a consequence of these mitigating actions, a combination of both "foregone" and "deferred" production volumes has been observed. This means that certain amounts of production were either completely lost or postponed, adding further complexities to the overall production landscape.
When confronted with power outages, companies must carefully evaluate the economic implications associated with alternative solutions such as operating generators or investing in renewable energy sources like solar and wind power. The mining industry, which demands a substantial amount of energy, is particularly vulnerable to the recurrent load shedding experienced in both South Africa and Zimbabwe. Unfortunately, the situation shows no signs of improvement, exacerbating the operational challenges faced by the sector.
In Zimbabwe, the impact of power outages has been particularly pronounced for RioZim, leading to a decline in gold output since the reintroduction of the Zimbabwe dollar. The intermittent power supply issues have further compounded the difficulties faced by the company. In response to this excessive energy deficit, Caledonia Mining Corporation has taken proactive measures to counteract the situation. They have successfully installed a 12 MW solar plant, which now caters to nearly one-third of their power requirements, specifically at 27%. This solar installation has proven to be a significant cost-saving measure for the company, as it reduces the need for generator repairs and diesel purchases.
The commissioning of the third concentrator at Zimplats, originally costing US$94 million, has paved the way for increased production. This expansion will result in an additional annual production capacity of approximately 80,000 ounces of 6E, necessitating a higher demand for power. In order to optimise the efficiency of this investment, substantial investments in alternative renewable energy sources are crucial.
Recognising the importance of sustainable energy solutions, Implats has already formulated plans to construct a significant 185 MW solar plant to support Zimplats' operations in Zimbabwe. As the largest platinum group metals producer in the country, Zimplats has applied to establish a 105 MW plant at Ngezi, located southwest of Harare, where its mines and two concentrators are situated. Additionally, mplats plans to build an 85 MW plant in the nearby Selous area, where a smelter and concentrator are located.
Currently, Zimplats relies on imported power from Mozambique's Hydro Cahora Bassa, underscoring the need for a more self-sufficient and sustainable energy supply. By investing in renewable energy sources, such as solar power, both Zimplats and Implats are taking proactive steps towards reducing their environmental footprint and securing a reliable and efficient energy source for their mining operations.
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