Zimplats in record platinum production
By Southern Times Writer
Harare – Zimbabwe’s largest foreign currency earner, Zimplats, achieved record production of seven million tonnes of platinum ore while recording after tax profit of $45,3 million, the firm’s latest financial results have revealed..
The results bode well for the country’s mining sector, which is the biggest foreign currency earner.
According to the company’s integrated financial results presented at a briefing in Harare last week, the after tax profit was a huge jump from $7, 3 million recorded the previous year. Zimplats also benefited immensely from export incentives that were introduced by the Reserve Bank of Zimbabwe after it earned $14 million from the scheme in the year under review.
The export incentive scheme was introduced through bond notes that were injected into the market to reduce demand for scarce foreign currency while simultaneously easing cash shortages.
In his statement accompanying the company’s financial results for the year 2016 to 2017, Zimplats chairman Dr Fholisani Sydney Mufamadi said despite depressed metal prices, the increased production and export incentives had given a huge boost to the company’s performance.
“While metal prices have remained low, good financial results were recorded for the year mainly due to the excellent production performance, the RBZ’s export incentive scheme and the disposal of treasury bills issued by the Government of Zimbabwe in settlement of the debt owed to the operating subsidiary by the RBZ.”
Dr Mufamadi reaffirmed the company’s commitment to invest $264 in the next few years in developing new mining areas.
“Your company remains committed to exploring, extracting and beneficiating it’s mineral resource. To this end, the company is investing $264 million in the development of a new mine (Mupani Mine) to replace Rukodzi and Ngwarati mines which will be depleted in FY2022 and FY2025 respectively.
“In addition, the operating subsidiary is planning to reline and improve the existing furnace to reduce the beneficiation risk.”
Dr Mufamadi said the future of the company remained bright despite the pressures from the liquidity challenges in Zimbabwe and low commodity prices on the world market.
Zimplats chief executive Mr Alex Mhembere also applauded the record production of platinum ore.
“I am delighted to report that the group achieved record mining and milling production in the year. The group achieved a record ore production of seven million tonnes in FY (Financial Year) 2017 (FY2016: 6.6 million tonnes). This was made possible by the good progress made on the redevelopment of Bimha Mine, which contributed production of 916 000 tonnes (FY2016: 442,000 tonnes).
“As reported previously, in May 2016, the RBZ introduced an export incentive scheme to promote the export of goods and services to enhance inflows of foreign currency. The group was awarded a 2.5% export incentive (amounting to $14 million) on the export proceeds received in Zimbabwe during the year 2016: $1,1 million).
Mhembere said after tax profit grew significantly by almost 70 percent.
“A profit after tax of $45,5 million was recorded during the year compared to $7,3 million in the prior period,” he said.
The Zimplats chief executive said revenue for the year increased by 9% from $471,8 million in 2016 to $512,5 million despite a 5% decrease in sales volumes from 582 833 ounces to 555,892 ounces.
Revenue was supported by an increase in average metal prices as gross revenue per platinum ounce improved from $1,638 to $1,868.
On treasury bills introduced by the government of Zimbabwe, Mhembere said: “The Government of Zimbabwe issued to the company’s operating subsidiary, treasury bills with a total nominal value of $34 million in settlement of the principal amount owed by the RBZ. The treasury bills were disposed during the year for a consideration of $20,8 million. The amount owed by RBZ had been written off in full in prior years.”
Zimplats’ contributes massively to Zimbabwe’s economy and between June last and June this year, the company paid $253 million to local suppliers as part of policy to support Zimbabwean’s procurement sector.
Mining is Zimbabwe largest foreign currency earner and last year the country received over $2,2 billion from mineral exports.