Platinum Expected to Grow By 20 Percent

Tawanda Musarurwa - the Herald

16 December 2010

ZIMBABWE'S platinum production is anticipated to grow by around 20 percent by the close of 2010 from last year's figures to top output across the minerals sector.

According to official statistics, output to October stood at 5 077kg and is expected to reach 8 500kg by the end of the year, from 6 848 kg in 2009.

The growth of platinum mining in Zimbabwe has been largely driven by the country's two largest platinum producers, Mimosa and Zimplats, which have been operating at optimal levels unimpeded by the economy-wide illiquidity, electricity shortages and a credit crunch that has generally constrained the enhancement of productive capacities.

Notwithstanding these economic impediments, production at the country's mines has been buoyed by consistently positive international Platinum Group Metal prices, which have resulted in positive cash margins for exports of PGMs from the country.

The platinum global prices have been averaging just below US$1 600 per ounce.

Platinum currently accounts for 36 percent of the country's total mineral production, reflecting significant growth for a minerals sub-sector that is a relatively recent addition to the mining sector.

In presenting the 2011 National Budget, Finance Minister Tendai Biti indicated that platinum production for the upcoming year has been targeted to reach 12 000kg on the back of investment expansion programmes at the Unki and Mimosa mines.

Among the key platinum projects are Zimplats' investments around US$500 million in the second phase expansion of its Ngezi Mine.

It is anticipated that over time and with increased investment, the Zimplats project has the capacity to produce around one million ounces of platinum on an annual basis to match the mother company, Impala Platinum's core Rustenburg mines in South Africa, although at comparably lower operating costs.

The Zimplats project is cheaper to run insofar as the operations are shallow and mechanised, compared with the deep-level, labour-intensive mines in South Africa.

London-listed Kazakh mining firm ENRC, which acquired 60 percent of the Bokai project near Gweru, has indicated that it is set to operationalise the platinum project estimated at US$250 million.

Amari Resources, an African-focused mineral exploration and development company, has determined to spend US$20 million for its pre-feasibility and Serui platinum project evaluation exercise.
Through its wholly owned Amaplat subsidiary, the company has a 50/50 joint venture with the Zimbabwe Mining Development Corporation known as Zimari Platinum for the Serui project.

Platinum output in the country has been on an upturn since the beginning of 2009. According to analysts Johnson Matthey's "Platinum 2010" report shows that platinum supplies from Zimbabwe have surged in 2009 from the previous period. Zimbabwean platinum shipments totalled 230 000 ounces, up from 180 000 ounces in 2008. Platinum production in Zimbabwe's anticipated sustained growth in the foreseeable future is buttressed by realisation that global demand for the mineral is expected to outstrip supply as other key platinum producers including South Africa and Russia's production wanes.

According to an earlier forecast by MiningWeekly.com, platinum production on a global scale may remain flat or even decline between 2010 and 2016.