ZIMBABWE’S largest platinum producer Zimplats has reported a somewhat poor 2013 second quarter performance to June on account of a 15% increase on cash-cost per ounce on its four primary products –– platinum, palladium, rhodium and gold (4E).
The increase in costs comes as the extractive industry is battling declining international metal prices which has seen Zimplats’ total revenue per 4E ounce declining by 19% to US$1 063 compared to US$1 307 the previous quarter.
According to the company’s second quarter report, the increase in cash-cost from US$515 in the first quarter to March 2013 to US$592 per ounce in the period under review was driven by lower production volumes, an increase in the effective electricity tariff and a provision made for obsolete stocks at year-end.
In the second quarter of 2012, the cash-cost per ounce was 3% above current period at US$608.
“Amortisation and depreciation costs increased following the commissioning of the Ngezi Phase II concentrator and other components of the phase II project in April 2013,” said Zimplats spokesperson.
The company said its Ngezi phase II concentrator has so far achieved design capacity and development of the new Mupfuti underground mine remains on schedule to reach full production in early 2015.
The new project is part of Zimplats’ plans to add 90 000 platinum ounces to its annual production, which stands at 180 000 ounces.
On its financial performance, Zimplats said total revenue for the period was 26% lower than the previous quarter at US$125,9 million due to the drop in sales volumes and a decrease in metal prices.
Operating costs were flat at US$103,4 million.
“Operating costs remained largely unchanged resulting in an operating profit of US$22,5 million, 66% down from the previous period,” the company said in a statement.
In terms of operations, total ore mined stood at 1,223 million ounces and 2% above the previous quarter while the head grade went down by 3% to 3,26 g/t mainly affected by milling lower grade ore from Mupfuti mine and Ngwarati stockpile.