/ 7 March 2006

Zim proposal makes mines ‘uneconomic’

The proposal by the Zimbabwe government that it own 51% of the country's platinum mines, with a proposed ceding of 25% for free, would render Zimbabwe's existing platinum mines, as well as any expansions, "uneconomic", Impala Platinum (Implats) Chief Financial Officer David Brown told I-Net Bridge on Monday.

The proposal by the Zimbabwe government that it own 51% of the country’s platinum mines, with a proposed ceding of 25% for free, would render Zimbabwe’s existing platinum mines, as well as any expansions, “uneconomic”, Impala Platinum (Implats) Chief Financial Officer David Brown told I-Net Bridge on Monday.

Implats is the world’s second-largest platinum miner. In Zimbabwe, Implats has an 86,7% stake in Zimplats and a 50% interest in the Mimosa platinum mine, with Aquarius Platinum holding the other 50% stake in Mimosa.

Implats had been looking to expand its operations in Zimbabwe, with the indigenous requirements for the country being one of the key areas of clarity the group had been seeking from the Zimbabwe government.

The other issue that Implats was seeking is to be granted a mining lease for the northern section of its mining area in Zimbabwe.

The Zimbabwe government had initially proposed that the indigenous requirement for platinum mines was 15%; it then proposed an indigenous requirement of 26% to 30%, which was closer to South Africa’s empowerment charter requirements, and then last Friday the government distributed the latest draft, Brown said.

Another key change in Friday’s draft was that the proposal had changed from a private indigenous shareholder to state ownership, he added.

The Zimbabwe minister of mines had proposed that the country’s Mines and Minerals Act be amended to provide for the Zimbabwe government to hold 51% of all platinum operations in the country, Zimplats said in a statement on Monday.

The proposed 51% stake that the Zimbabwe government would take in the country’s platinum mines would be made up by a non-contributory 25% stake, and the balance by way of contribution over a period of time, Zimplats said.

Implats had previously sought a bilateral agreement between the South Arican and Zimbabwe governments, but at the group’s interim results Implats Chief Executive Officer Keith Rumble said that it was not an absolute imperative for further investment.

Rumble also said that the company would complete a feasibility study on expanding Zimplats to about 4 000kg a year, with the expansion to go before the boards of Zimplats and Implats in May. — I-Net Bridge.