- Output increased by 2%
- This was anchored by Zimplats operations
- Expected to increase by 5% in FY23
Harare- In the latest report from the World Platinum Investment Council, Zimbabwe's platinum output for Q2 2023 experienced a significant 2% increase (+2 koz) compared to the same period last year, reaching 126 koz. This marks the highest level achieved since Q4 2021, a noteworthy accomplishment considering the power challenges and currency volatility faced by the country.
The growth in platinum production comes at an opportune time, as the two largest platinum producers globally, South Africa and Russia, have witnessed a decline in their production levels. Zimbabwe, on the other hand, has managed to boost its output, driven by increased production from Zimplats. This noteworthy achievement was attributed to the successful commissioning of a concentrator, resulting in additional milled ore volumes being realized.
Zimplats, which is owned by Implats, holds the position as the largest platinum producer in Zimbabwe. Other notable companies making substantial contributions to platinum production in the country include Unki, owned by Amplats, and Mimosa, jointly owned by Implats and Sibanye Stillwater.
In September 2022, Zimplats successfully commissioned a third concentrator. Prior to its commissioning, the company had an annual platinum production of approximately 2.4 million metric tonnes. However, with the new concentrator now operational, Zimplats anticipates a significant boost in production, expecting to reach an impressive 4.2 million metric tonnes per year.
Despite facing power challenges, Zimplats has managed to sustain its upward trajectory in terms of output. The company's success can be attributed to a Zambian power import agreement, which has helped mitigate the effects of national load shedding that have impacted other producers in Zimbabwe.
It is worth noting that Zimbabwe continues to struggle with power challenges, despite promoting the notion of having an electricity surplus.
Despite the modest 2% increase, resulting in a record-breaking 126,000 ounces of platinum output for Q2 2023, the World Platinum Investment Council (WPIC) anticipates a more substantial 5% increase in output for the entire year of 2023.
This projected growth is a notable accomplishment, particularly when considering the global platinum output is forecasted to decline to levels not witnessed since 2013, indicating a decline spanning a decade.
Platinum, taking the second spot as the largest mineral export, follows closely behind gold and is anticipated to make a substantial contribution to the thriving US$12 billion mining industry in Zimbabwe.
According to the report, mine production in Zimbabwe is expected to achieve a remarkable milestone in 2023, reaching a record-breaking level of 502,000 ounces (koz). This represents a notable increase of 22,000 ounces compared to the preceding year.
The growth in production is primarily attributed to the expansion of capacity at Zimplats, the largest platinum producer in Zimbabwe. Zimplats operates multiple mines, including Mupfuti, Bimha, and Mpupani, which have contributed to the overall increase in platinum output.
However, the overall global platinum output for 2023 is expected to face challenges due to two main factors: the increased adoption of electric vehicles and reduced production volumes from Russia and South Africa.
The forecasted deficit for 2023 has risen by 22 koz to a total of 1,005 koz since the release of the Q1'23 Platinum Quarterly report in May 2023. This increase reflects a year-on-year stagnation in total supply and a significant 27% surge in demand compared to the previous year.
The updated outlook for 2023 now predicts a platinum deficit of 1,005 koz, which is 2% higher than the deficit previously reported in the last Platinum Quarterly report. This updated deficit represents a substantial 12% of the projected full-year demand in 2023, marking the highest percentage ever recorded.
The anticipated deficit in platinum supply has led to an expected increase in demand, which is projected to reach a total of 8,230 koz in 2023. This represents a significant 27% year-on-year increase. Within the demand sectors, automotive demand is set to rise by 381 koz compared to the previous year, while industrial demand is expected to reach a record level in our series, with an increase of 336 koz. Investment demand, which was previously in a net-negative state, is forecasted to improve and become positive, with an estimated increase of 386 koz.
The total supply of platinum for 2023 is projected to remain stagnant compared to the previous year, with a forecasted value of 7,224 koz. Both primary and secondary supply conditions are expected to pose challenges, leading to this flat year-on-year supply. It is worth noting that this total supply estimate is 7% lower than the average annual output observed since 2013. This presents an opportunity for Zimbabwe's platinum sector to capitalize on the supply shortage and potentially benefit from increased demand and higher prices in the market.
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