Harare – Platinum mining company Impala Platinum (Implats), which is collaborating closely with the South African government to preserve jobs at the heavily lossmaking Impala Rustenburg operation says it is also working in very close cooperation with the government of Zimbabwe, where it has secured major tax relief.
In an interview with Mining Weekly Online, Implats CEO Nico Muller said he recently met with Zimplats CE Alex Mhembere at a ceremony to hand over a refurbished Kadoma regional hospital which was presided over by President Emmerson Mnangagwa and five Cabinet Ministers.
He said there is a marked improvement between Implats relationship with the Government of Zimbabwe following President Mnangagwa's mantra that the country is open for business.
Muller said he spent the entire day with Mhembere plotting the future and agreeing to combine the company with the efforts of the Zimbabwean government to grow the Zimbabwean economy.
Implats said it has released ground beyond Portal 10 at Zimplats, for which it had no immediate plans.
“We were very happy for the government to allow new entrants to potentially explore that. We’ve seen announcements of a $4-bilion investment coming, but we do understand that there are significant barriers to entry,” Muller told Mining Weekly Online.
He said he do understand that there is significant barriers to entry hence Implants do not expect a significant investment in platinum extraction in the short term.
“We are not necessarily expecting a significant investment in platinum extraction in the short term, but to the extent that there is any development on the ground Implats has released, the company has undertaken to collaborate with the new participant, who will require available processing capacity.
“This places Implats in a position to increase the ability of Zimplats to contribute financially to the changes between the special mining lease and the mining lease, which will see the company benefiting significantly from a much reduced tax rate.
“The upshot is the creation of a far stronger economic vehicle in Zimplats, through the strengthening of its ability to contribute to the group.”
Muller said Implats has mandated Mhembere to seek out other opportunities in Zimbabwe, where the company is eager to explore business linkages with the supply chain and to evaluate predominantly platinum group metals-related openings, as well as moderate diversifications outside of the existing portfolio, to the extent that these add value to the company.
Implats regards the success of its business in Zimbabwe as being related to the success of the economic development of Zimbabwe and does not believe that it can be successful by just growing itself in what is a relatively small economic environment.
“We have to assist the government to grow the size of the pond in which we operate to reduce their reliance on our foreign exchange earnings and to distribute that across a broader economic front.
Muller added that if there were value accretive opportunities, it would make sense if they were related to the automotive industry, because that is a market that we study and that Impala know, or to metals associated with platinum group metals, for example chrome.
He said they have chrome in their current business and if there are any chrome opportunities in Zimbabwe that Impala believe will assist the government to grow the economy, it is something Impala will at least look at.
According to an announcement last week by the World Platinum Investment Council (WPIC), the global platinum will end the year in a surplus of 295 000 ounces as both supply, from main producers Zimbabwe, South Africa and Russia, and demand will fall by 2 percent.
WPIC said global demand, which will fall to 7,615 koz, is expected to remain low due to lower production of diesel vehicles in Europe which will cut platinum use by vehicle manufacturers by six percent.
Koz is equal to a thousand platinum ounces. Platinum is used by vehicle manufacturers in catalytic converters which reduce gas emissions.
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