IMPALA Platinum Holdings Ltd (Implats) aims to increase output of the precious metal from its Zimbabwe mines by 100 000 ounces to 260 000 ounces by 2010, but faces electricity and skills shortages.
Implats, the worldâ€™s second-biggest platinum producer, has key mining operations in Zimbabwe, which has the worldâ€™s second-biggest platinum reserves after South Africa.
Implats chief executive David Brown told Reuters on Tuesday his firm was spending about US$360 million to expand its Mimosa and Zimplats operations in Zimbabwe, which is in the grip of a severe economic crisis.
Implats has a majority stake in Zimplats Holdings LtdÂ and a joint venture with Aquarius Platinum in Zimbabweâ€™s Mimosa mine.
The expansions would boost output to 100 000 ounces a year at Mimosa from 69 000 ounces currently, and to 160 000 ounces at the Zimplats operation, which produces 91 000 ounces a year.
â€œZimbabwe is a big blue sky opportunity,â€ Brown said.
â€œThe opportunity on the upside is enormous, but the investment climate is difficult â€” any improvement in this would allow us to expand and inject further capital,â€ he said in emailed responses to questions.
Zimplats has a long-term output target of 1 million ounces.
â€œPower supply, skills and investment climate are big issues which cloud the horizon in Zimbabwe. Risks still exist, such as the infrastructure, which has degraded,â€ Brown said.
â€œWe have operated immensely well under inordinately difficult circumstances.â€
Implatsâ€™ expects its production to fall just under 2 million ounces this year from 2, 026 million ounces in 2007, hurt by a power shortage that has forced miners to curb electricity consumption to 90% of normal needs in South Africa.
Brown said there was still not much clarity on a Zimbabwe draft mining Bill, under which the government is to acquire a stake in foreign-owned mining companies.
A top Zimbabwean government official told Reuters earlier this month his government would not force firms to give a stake to the government for free as had been previously feared, but would pay a market value for a 25% stake. The Bill would be debated in parliament after the polls, he said.
The proposed Mines Bill follows the passing in September last year of a general Bill giving a 51% stake in foreign-owned firms to Zimbabweans. That Bill did not include a provision for a 25% government shareholding.
â€œThere is unlikely to be further progress until after the elections,â€ Brown said of the draft Bill.
Zimbabwe says the draft Mines Bill would take into account credits towards the 51% local-ownership requirement for any mining firms that gave up some unused mining claims and invested in roads, power and other infrastructure.
Implats has said it has met most of these goals and is â€œwell positionedâ€ to win the credits and that, in principle, it supports the aims of localisation. â€” Reuters.