Harare- Zimplats Holdings Limited, a key player in the platinum group metals (PGMs) industry, has witnessed a notable 7% increase in mined volumes, despite experiencing a decline in profitability caused by volatile market conditions. For the full year ended 30 June 2023, the company achieved a total of slightly above 7.6 million tonnes, surpassing the projected 7.5 million tonnes set by its parent company, Implats, during the week to August 11 this month. This milestone represents the highest production output in the company's history, surpassing the 7.1 million tonnes achieved in the previous year. Profitability declined by 42%, surpassing an estimation of 20% by Implats.

However, alongside this expansion in mined volumes, there was a decline in the mined grade. This decrease can be attributed to changes in the mining mix, indicating a shift in the composition of the ores being extracted. Despite these challenges, Zimplats has successfully achieved notable progress in production across its mining units and maintained a level of profitability, although it did not surpass the performance of the previous year but still showed improvement.

In a statement released accompanying the full year preliminary results, the company said mined grade was adversely affected by changes in the mining mix. This was primarily due to an increase in lower-grade development tonnages and higher volumes of production from the upper ore zone (UOR1), which has a high dilution factor. As a result, the average head grade for the financial year declined by 2% to 3.34 grams per tonne (g/t) compared to 3.34 g/t in the previous year.

When mining operations encounter different ore bodies or zones, each zone may have varying mineral grades. In this case, the increased production from the upper ore zone (UOR1) contributed to the decline in the overall mined grade. The upper ore zone contained a higher amount of dilution, which refers to the mixing of waste rock or lower-grade material with the desired ore during the mining process. The presence of dilution can lower the overall grade of the extracted ore, impacting the economic value of the production. As a result, the average grade of the ore extracted during the period decreased, affecting the overall quality of the mined material.


The Mupfuti Mine demonstrated a notable 16% increase in mined tonnage, which was attributed to the stabilisation of performance by the Trackless Mining Machinery (TMM) contractor. This improvement indicates that the contractor's operations have become more consistent and efficient, resulting in increased production at the mine.

Both the Bimha and Mupani mines surpassed expectations by achieving remarkable surges in tonnage. Bimha mine experienced a 20% increase in tonnage, while Mupani mine recorded an exceptional 151% surge. Mupani has a design capacity of 2.2 million tonnes per annum and has steadily increased its contribution from 3% in 2020 to 151% in FY2023. These impressive results indicate that these mines have made significant progress towards reaching their designated capacities, reflecting successful optimisation efforts and operational enhancements.

Ngwarati Mine witnessed an 8% boost in production, benefiting from the introduction of a development fleet. The utilisation of this fleet has contributed to increased productivity at the mine, highlighting the effectiveness of the fleet in supporting mining operations and driving production growth.

Financial Overview

Despite the company's achievements in production advancements, it faced a challenging market environment that resulted in a significant decline in revenue. The company experienced a 23% decrease in revenue, totalling US$962.3 million compared to US$1.2 billion in the previous fiscal year. This was primarily attributed to a softening of average metal prices during the period. As 6e production declined, the company witnessed a decline in gross revenue per 6E ounce sold. The gross revenue per ounce decreased by 20% to US$1,595 in FY2023, compared to US$1,996 in FY2022. This decline in gross revenue per ounce sold further contributed to the overall decrease in revenue.

The sales volumes of 6E ounces were 3% lower at 603,000 ounces in FY2023, compared to 623,000 ounces in FY2022. This decrease in sales volumes was primarily due to administrative delays in the prior period. These delays impacted the timing of sales, resulting in lower sales volumes during the current financial year. The combination of lower gross revenue per ounce and lower sales volumes resulted in the significant decline in revenue for the company. The challenging market conditions and the softening of metal prices had a notable impact on the company's financial performance during this period.

The cost of sales increased by 10% to US$651.9 million, compared to US$594.3 million in FY2022. This increase was primarily driven by rising operating cash costs. As a result, the operating cash cost per 6E ounce rose by 16% to US$837 per ounce, compared to US$724 per ounce in FY2022. This increase was mainly due to a combination of inflation and additional engineering costs.

The lower gross profit and increased operating costs, the company reported a decline in profit after tax. The profit after tax for amounted to US$205.5 million, compared to US$353.6 million in FY2022. Although this decrease is significant, it is worth noting that the company remained profitable despite the decline in 6E production and revenue.

The income tax expense for the company also decreased to US$81.4 million, compared to US$240 million in FY2022. This decrease in income tax expense contributed to the overall decline in profit after tax.

Capital Projects

As part of its US$1.8 billion investment plan, the company earmarked US$304 million for new projects. During the period preceding June, Zimplats bolstered its capital project expenditures by 13% to enhance mining and processing capabilities, which encompassed the construction of a refinery.

Zimplats unveiled a substantial investment of US$1.8 billion as part of its development strategy to establish the Mupani Mine, effectively replacing the exhausted Rukodzi Mine since June of the prior year. The forthcoming Mupani Mine is also intended to serve as a replacement for the Ngwarati Mine, which is anticipated to conclude its operational lifespan by 2025. Presently, Zimplats has already committed an investment of $252 million in the development endeavors of the Mupani Mine.

Zimplats further allocated a sum of $28.7 million towards the enhancement of the Bimha Mine. This strategic investment aims to partially offset the anticipated decline in tonnage from the Mupfuti Mine, which is projected to be depleted by 2027.

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