ZIMBABWE’S largest platinum producer Zimplats says commissioning of its phase two expansion project will bring the country a step closer to establishing a base metal refinery, a company official said.
Speaking at the just ended Imara Edwards Securities 2013 Zimbabwe Conference earlier this week, Zimplats CEO Alex Mhembere said the new project, expected to commence this July, would add 90 000 ounces of platinum to his company’s annual production and increase national output to 430 000 platinum ounces annually.
Zimplats currently produces 180 000 platinum ounces a year, 145 000 palladium ounces , 20 000 gold ounces , 16 000 ounces of rhodium.
Mhembere said the numbers would grow by 30 % when phase two is commissioned.
The gross national production from the three major platinum producers — Zimplats, Unki Mine and Mimosa — falls short of the 500 000 ounces per year which the industry says is required to support the setting up of a smelter.
“A minimum of 500 000 ounces per year is required and I am happy to say that we are very close to that if we combine our production, currently sitting at 350 000 ounces. With the new project, we will be at 430 000 ounces annually,” Mhembere said.
“Our view is that Zimbabwe cannot afford more than one refinery so we will set up a single Zimbabwe Refining Services.”
However, the setting up of the beneficiation plant could be bogged down by funding challenges.
Mhembere said in order to add 120 000 ounces of platinum to national output to support expenditure in bigger smelters as well as cost associated with mining deeper into the ground, an investment of at least US$1 billion was needed.
“To invest in the refinery itself, capital requirements of US$2,8 billion is required,” he added. Zimplats has so far invested US$30 million towards feasibility studies for setting up a refinery locally.
Mhembere said the economy was suffering due to erratic power supply in the face of a huge supply deficit of about 800 MW in the country.
Apart from the power shortage, mines pay huge utility bills after Zesa Holdings increased tariffs to a point large consumers like Zimplats pay US$0,09 per kilowatt hour (kw) while the smaller mines are paying as much as US$0,14/kw.