Karo Holdings extends production timelines

KARO Mining Holdings (KMH), a resources exploitation firm that is developing a Tier 1 platinum group metals (PGMs) mining operation in Zimbabwe says owing to the current PGM basket price weakness and uncertain global economic outlook, it has extended the Karo Platinum first ore in mill (FOIM) to June 2025.

Initially, the first ore was expected in the processing mill by July 2024.

Over the past 12 months, the mining industry across the globe has experienced softening prices for key minerals with the most affected being rhodium -74 percent, lithium -69 percent, diamond -60 and nickel -8 percent.

The World Bank’s metals and minerals price index rose 10 percent in the first quarter of 2023.

Price increases at the beginning of the year reflected positive sentiment about stronger demand amid supply disruptions for some key metals.
Metal prices were forecast to fall this year as supply recovers amid weak demand in advanced economies and China. Zimbabwe’s mining companies said operating costs had increased by 10 percent in the past 11 months.

Karo has invested more than US$70 million while a total of US$391 million would be sunk in the project under the first phase of the project.
Karo’s multimillion-dollar platinum mine is one of several multi-million dollar projects that took off and have seen rapid development progress since President Mnangagwa’s pro-business administration came into power in 2017.

In the production report for the fourth quarter and year ended 30 September 2023, Tharisa chief executive officer Mr Phoevos Pouroulis said the divergence in commodity prices could not have been more visible than the past quarter which saw us touching 52-week highs in the chrome market based on solid fundamentals.

However, the fundamentals were distinctly lacking in the PGM market, which saw prices drop more rapidly and lower than the market anticipated, resulting in broad-based challenges for the PGM market on the supply side.

He noted that the PGM price environment has necessitated a review of the commissioning timeline of the Karo Platinum Project.

The first ore in mill (FOIM) is now planned for June 2025.

“Given the current PGM basket price weakness and uncertain global economic outlook, we have taken the measured decision to extend the Karo Platinum timeline out to commissioning by June 2025, with the opportunity to accelerate the timeline as markets become more favourable,” said Mr Pouroulis.
He said the revised timeline is aligned to funding availability and provides flexibility to navigate volatile market conditions.

“Our growth strategy remains firmly intact, with continuous optimisation at the Tharisa Mine, investment in downstream beneficiation, and our commitment to the development of the multi-generational Tier 1 Karo Platinum Project,” he added.

Mr Pouroulis added that the project team has divided major work streams into smaller commitments to ensure continued development aligned with funding availability.

Manufacturing of key long-lead items nearing completion and the revised workstreams designed to accelerate the project implementation should the PGM market become more favourable.

Pilot mining is continuing as planned to optimise mining design, and additional current resources to reserve conversion underway , he noted.
While current markets are volatile and unpredictable, Mr Pouroulis said the medium-term outlook for PGMs is underpinned by a supply-side constrained economy, supported by a robust chrome market driven by stable demand.

The Karo project, together with other upcoming platinum projects and upgrades from existing platinum mines worth over US$10 billion, is set to position the country as a global platinum powerhouse.

The World Platinum Investment Council (WPIC) considers Zimbabwe to have the world’s second-largest platinum group metals (PGM) resource, after South Africa, on the Great Dyke.

Zimbabwe has the world’s second-largest platinum deposits after South Africa. The Government has designated mining as one of the key anchors expected to drive short to medium-term economic growth.

The Special Grant awarded to Karo Platinum is located in the Great Dyke in the Mashonaland West District, approximately 80kilometres southwest of Harare and 35km southeast of Chegutu, south of the Zimplats (Zimbabwe’s largest platinum producer) Selous Metallurgical Plant and north of the Zimplats Ngezi operations.

The Great Dyke is a PGM (Platinum Group Metal) bearing geological feature that runs from north to south in Zimbabwe.

It is approximately 550km in length and up to 11km wide, second to the Bushveld Complex of South Africa, the world’s largest platinum producer, in terms of its PGM resource base.

The company said construction of bulk earthworks commenced in December 2022, and the first concrete was poured in June 2023.-chronicle