Zim's mining sector surges amid the gloom
Despite an economic slump, food queues and fuel shortages, mining activity is surging in Zimbabwe.
The combination of a currency that is competitive in United States dollar terms, a skilled workforce and a climbing precious-metal price have made the outlook for Zimbabwean mining profitable.
Zimbabwe Platinum Mines (Zimplats) is pioneering the way, aided by what MD Roy Pitchford described as the “Makwiro Fiscal Regime”.
Makwiro is a mineral-rich region south-west of Harare.
The Makwiro Fiscal Regime allows that, in return for a long-term commitment and a diminished shareholding, Zimplats is entitled to use US accounting practices and bank 100% of foreign earnings offshore. To encourage expansion, there is an undertaking to lower income tax from 25% to 15%, while the company enjoys a five-year tax holiday, having invested US $82-million across its mines.
The platinum mines, registered in the Channel Island of Guernsey and listed on the Sydney stock exchange, are majority-owned by Impala Platinum Holdings of South Africa. Last year Impala increased its stake in Zimplats to 83%. It has now earmarked 11% of its holding and the remaining 17% for black economic empowerment ownership.
Zimplats announced that it has extended the life of its principle mine at Hartley/Ngezi by an estimated 30 years, after opening a new shaft.
It is expanding production at Selous, Hartley and Ngezi, all in Makwiro. This, in addition to an estimated 60-million ounces of platinum, may hold additional reserves of more than 100-million ounces of palladium.
The new Ngezi underground’s 45 000 ounce-per-annum “trial mine” has been commissioned and is due to come on stream this month, according to Pitchford.
The Impala and Aquarius 50:50 joint venture in the Mimosa mine in the Southern Chamber will contribute an estimated 65 000 ounces. It is projected that this will increase to an overall 145 000 ounces by the end of 2005.
Modern equipment is also being introduced, including an expanded smelter at the Selous mine. A sophisticated ore sampler, designed to “ensure maximum recovery” of ore, has recently been installed.
Not to be outdone, the world’s largest platinum miner, Angloplat, which has reserves in the same area, is scheduled to restart production at Amzims’ Unki mine. A Johannesburg- based analyst suggested that “it could make a significant contribution in as little as two to two-and-a-half years”.
Another mine that is expanding is the coal mine, Wankie Colliery, explained its newly-appointed MD Godfrey Dzinomwa. The open-caste mine remains in operation, and is currently operating at 70% of its capacity, producing 450 000 tonnes a month of coking coal. A new underground “low-sulphur mine shaft” is due to begin production this year.
Chrome has been a regular export for the past 50 years and remains a sturdy and popular earner for Zimbabwe. This year Minister for Mines and Mining Development Edward Chindori-Chininga expressed the hope that a further 15 000 to 19 000 tonnes of ferrochrome would be converted to “high-grade ferochrome”, presumably for export.
Officially, nearly nine-tenths of Zimbabwe’s hard currency (in US dollars) is earned through mining income.