Zimplats commits over US$570m to capital projects
The group said the plan to upgrade Mupani Mine and Bimha mines as replacements for Mupfuti Mine, which
depletes in FY2027, was approved by the board during the 2021 financial year.
Zimbabwe’s largest platinum producer, Zimplats has lined up capital projects valued at over US$570 million, with the projects at different stages of implementation spanning up to year 2027.
The projects resonate well with the Government’s quest of the mining sector becoming a US$12 billion industry by 2023 as well as the broader Vision 2030 which seeks to fundamentally transform Zimbabwe to an upper middle income economy by 2030.
According to Zimplats’ financials for the year ended June 30, 2021, the firm spend a total US$159,1 million on capital projects including stay-in-business, replacement and expansion projects, an increase from US$104,2 million spent in the 2020 financial year.
“The redevelopment of Bimha Mine is largely complete with cumulative spend of US$100, 3 million, in line with the estimated project budget of US$101 million,” the company said.
The group said the plan to upgrade Mupani Mine and Bimha mines as replacements for Mupfuti Mine, which depletes in FY2027, was approved by the board during the 2021 financial year.
Mupani Mine will be upgraded from the current design capacity of 2,2 tonnes per annum (tpa) to 3,6tpa at a total additional cost of US$122,6 million, thereby increasing the estimated total project cost from US$264 million to US$386 million.
The group said US$48,4 million was spent during the year increasing the cumulative total project expenditure to US$146,6 million at year end.
“Full production capacity of the upgraded mine is expected to be achieved in August 2028,” Zimplats said.
At Bimha Mine the upgrade is from the current design capacity of 2.0tpa to 3.1tpa and the project is progressing well and is currently ramping up to achieve full production capacity in 2023. During the year under review, US$6,9 million was spent from an approved budget of US$81,7 million.
The board also approved the Phase 3A concentrator expansion, which will increase production capacity by 0.9tpa. According to the group, the project comprises of a third concentrator plant project at Ngezi which commenced in FY2021.
“The plant will process the additional ore volumes from the early ramp up at Mupani Mine and Bimha mines and is expected to be commissioned in the first quarter of FY2023.”
“During the year, US$14.7 million was spent from the project budget of US$93.8 million,” Zimplats said.
The group has also lined up the acquisition of additional trackless mining machinery fleets to supply the expanded third concentrator plant at a total project cost of US$17,6 million. “During the year under review, US$9,8 million was spent to support the unconstrained ramp-up production profile.”
Group chairman, Fholisani Mufamadi, recently pledged the group’s committment to ramp up its economic participation in Zimbabwe through investments in the various sectors of the economy.
This comes as the group launched a cattle ranching Joint Venture project with Palmline Holdings in Ngezi, Mashonaland West.
Finance Minister Mthuli Ncube, also recently highlighted that Zimplats features highly in the economy through participation and contributes over US$160 million in taxes to the Government annually.
In terms of operations, the Group noted that it was spared from operational disruptions as mining continued to be categorized as an “essential service” in Zimbabwe.
As a result, volumes of mined and milled ore were sustained at similar levels to the previous year at 7,2 million tonnes and 6,8 million tonnes, respectively.
The company noted that following the collapse of a section of the highwall western box cut at the Ngwarati Mine in February 2021, production teams were redeployed to other operations while rehabilitation was underway. Production at Ngwarati Mine restarted on July 1, 2021 and ore production from Mupani and Bimha mines increased significantly
from the previous year.
“The Mupani Mine project increased access to stopping panels, while Bimha Mine benefited from the temporary redeployment of Ngwarati production teams,” the Group noted.
The group said that 6E production at 579 000 ounces in the year under review, was almost flat from 580 000 ounces in 2020 due to a proactive response plan implemented by management in the wake of the Ngwarati Mine high wall collapse and subsequent temporary closure of that mine. 6E production implies the production of six metals that
are platinum, palladium, rhodium, ruthenium, iridium and gold.
The group’s revenue for the year increased by 56 percent to US$1,4 billion compared to US$868,9 million in prior year primarily due to the increase in the prevailing average metal prices during the year.
Revenue per 6E ounce sold increased to US$2 493 from US$1 566 in 2020 and 6E ounces sold decreased by 2 percent to 543 000 ounces compared to 555 000 ounces in 2020 largely due to an administrative delay in the export of production towards year end.
“Despite the 2 percent decline in volumes sold, cost of sales increased by 14 percent to US$546,7 million compared to FY2020’s US$480.4 million primarily due to an increase in revenue indexed expenses resulting from the higher revenue achieved in the year,” the group said.
Operating cash cost per 6E ounce increased by 8 percent to US$661 per ounce from FY2020 level of US$613 per ounce mainly due to deterioration in 6E head grade and recovery, an increase in revenue-indexed expenditure and Covid-19 administration costs.
The gross profit margin increased to 60 percent from 45 in prior year primarily due to higher metal prices.
“The income tax expense increased to US$237,4 million on higher profitability. As a result, profit after tax increased to US$563,1 million from 2020’s US$261,8 million.”-ebusinessweekly
