Depressed global prices force Zimplats to slash social spending
THE country’s largest producer of platinum group metals (PGMs), Zimplats has announced that it is spending millions on economic empowerment through the Local Enterprise Development (LED) programme.
It invested nearly US$1 million in social performance programmes in 2024 compared to US$4,7 million last year and US$4,3 million in the 2022 financial year.
In its integrated annual report covering the financial year (FY2024), from July 1, 2023 to June 30, 2024, the mining house said the reduced social spending was due to the depressed global metal prices, which saw the business focus more on navigating the tough operating terrain.
“Each year, we review our strategy to consider whether it continues to meet the needs of our stakeholders and business. To make an impact in our host communities, we had to do more with little in the period under review to live up to our purpose of creating a better future for all our stakeholders,” reads part of the report.
“This was done through investing in low-cost, but high-impact projects, among them, the provision of clean water, raising public awareness to fight the outbreak of cholera and the prevalence of drug and substance abuse. We also progressed the albinism initiative,”
The company said despite the reduced social spending, the negative effects on local communities were considered minimal.
“In the wake of the El Nino-induced drought, which depleted groundwater sources in communities within our footprint, the boreholes that were drilled by Zimplats gave these communities access to potable water for domestic use,” read the report.
“Communities also created vegetable gardens to mitigate the impact of the drought, while generating income to meet their other basic needs. These positive impacts were appreciated by the communities.”
The report said Zimplats has maintained its thrust for economic empowerment through the LED programme.
Launched in 2013 to capacitate and grow local indigenous companies, the LED programme aligns with Zimplats’ way of doing business, including the adoption of its core values.
It has positively contributed to a resilient supply chain for the group and economic empowerment of local enterprises.
For instance, total procurement spending in FY2024 amounted to US$700 million, a six decrease against last year’s spend of US$742 million.
Local spending totalled US$357 million, which is 51 percent of the overall spending for FY2024.
The dip in foreign spending was mainly attributable to Zimplats’ reduction in growth and expansion capital projects, while local spending increased slightly by two percent.
“Despite the subdued business activity due to the ongoing low metal price environment, management has kept supporting its various LED entities within the confines of the available resources. Some LED entities that depend exclusively on Zimplats for business, were affected as the business adapted its strategies to the changing operating conditions,” read the report.
The LEDs programme which aligns with SDG 8.3, whose focus is on supporting job creation and the growth of enterprises comprises 23 SMEs, of which 30,4 percent are women and youth enterprises.
The LEDs entities supplied Zimplats with various products and services, which included engineering services, medical supplies, haulage/trucking, borehole drilling, labour broking, underground support, legal advisory services, insurance brokerage, catering and facilities management solutions, protective clothing, bricks, and silica supplies.
“As of 30 June 2024, LED spending amounted to US$53 million, a 19 percent decrease compared to last year’s spending of US$66 million.
“The decrease is in line with the curtailment of some projects due to the depressed global metal prices. A total of US$460 million has therefore been invested in the procurement of goods and services from the LEDs since the programme’s inception in 2013.”
Zimplats says its procurement constitutes more than 60 percent of spending and drives the efficient flow of operations from breaking ground to smelting and converting.
By embedding social value and sustainability in procurement, management ensures that all vendors that supply into the business comply and meet ESG goals in line with national and global goals.
“Our local strategy for LEDs includes a programme specifically designed to contract local suppliers within the community for the supply of goods and services, thus buttressing our commitment and contribution to Zimbabwe’s sustainable development through environmental preservation and wealth creation for the local communities,” said Zimplats.-chronicles
