HomeBusiness DigestZim to construct $200m refinery, postpones 15% platinum tax

Zim to construct $200m refinery, postpones 15% platinum tax

ZIMBABWE plans to construct a 300 000 tonne platinum refining plant in a joint venture with an Australian-based firm Kelltech at an estimated cost of US$200 million, Mines Minister Walter Chidhakwa said on Wednesday

the source.

The southern African nation, which holds the world’s largest platinum deposits after South Africa, will only implement a ban on exports of platinum concentrate after completing construction of the facility, Chidhakwa added, effectively postponing a punitive 15% tax meant to come into effect next year.

State-owned Zimbabwe Mining Development Company (ZMDC) will have a 30 percent stake in the joint venture while Kelltech will control 49%, with the remaining 21% under a local partner only identified as Golden Sparrow, Chidhakwa said.

Construction of the refinery is expected to start next year and will take between 18 and 24 months, he added.

In 2013 government proposed a tax on raw platinum exports to compel mining companies to invest in smelting and refining capacity in Zimbabwe. The tax was supposed to come into effect in January 2015 but was pushed to 2018 to allow the miners time to set up the facilities.

“We have been trying to use taxation but until we have established a facility to process locally the companies will continue to argue that we are being unfair. Once we have processing capacity locally we will institute a law that the amount of concentrate produced first takes care of the capacity that would have been established locally before it can be exported,” Chidhakwa told journalists.

Despite the miners constructing their own refinery facilities, Chidhakwa said they will be directed to process at the State-controlled facility.

“As government we will direct the mining companies to sell at market prices to the facility. We have made it clear that as soon as a refinery is built locally, we would want processing done locally. South Africa actually has a law where you can’t take concentrate to process it outside the country,” said Chidhakwa.

Kelltech director Keith Liddell told the press conference that the refinery would employ a patented technology known as Kell Process which consumes less electricity compared to conventional refineries.

Currently, all three platinum miners which operate in Zimbabwe – Anglo American Platinum (Amplats)’s Unki Mine, the Impala Platinum owned Zimplats and Mimosa Mine, a joint venture between Sibanye Gold and Impala, send their matte for refining in South Africa.

Zimplats has said construction of its smelter is nearing completion while Unki expects to complete its refinery facilities in the second half of next year.

Mimosa has said that its operation is too small to sustain its own refining facility but would work with other mines over time to put one in place.

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