Zimbabwe needs to relax local ownership laws and forex retention regulations to back investors, says the chair of Anglo American Platinum (Amplats), as it commissioned its US$62 million smelter at Unki on Thursday.
Zimbabwe in 2018 scrapped laws that compelled foreign investors to cede 51% to locals, but retained the law for platinum producers pending a new policy on platinum. Under foreign exchange regulations, mines surrender 50% of their forex earnings to central bank, while the remainder is paid out in local RTGS at the interbank rate.
Amplats chairman, James Maposa, at the commissioning event in Shurugwi attended by President Emmerson Mnangagwa, said these regulations were stalling progress.
“Unki must be profitable for it to pay taxes. We want to continue discussions to help the mine prosper,” he said.
Amplats spokesperson Jana Marais said the ownership law was one of the issues they are engaging the government on.
“Some outstanding regulatory issues – in particular the indigenisation policy for the PGM sector – are [other] issues that we are engaging with government on,” said Marais.
Following a briefing with Anplats executives at the site, Mnangagwa pledged to have the ownership requirements lifted.
With the new 8.5MW smelter, Unki will now produce and export a platinum concentrate matte. Previously, the company exported ore concentrate to South Africa for processing.
“The scope of the facility is the primary smelting of Unki concentrate to produce a furnace matte which is crushed on site and transported to the Anglo American Platinum Converter process facility in Rustenburg, for further processing,” Amplats says.
The first export of crushed matte was done in mid-November 2018. Production started in September.
“The smelter is sized to meet Unki’s current production, however, it retains the capability for later upgrade to meet future increased mine production.”
Speaking to reporters at the site, Mnangagwa said the smelter was the result of a government push to add value to raw minerals and to bring new technology into Zimbabwe.
“One; value addition is necessary. Two; bringing the technology into Zimbabwe. Three; satisfying ourselves as Zimbabweans that all the by-products which come out of minerals are actually reached here, before they go to South Africa,” Mnangagwa said.
Mines Minister Winston Chitando added: “The establishment of this smelting facility will result in a reduction in the amount of PGMs concentrate being exported, the development of key infrastructure, increased foreign currency earnings and employment for our local people.”
Unki will have smelting capacity of about 623,000 tonnes per year.
The smelter will help ease some of the pressure from government on miners to add value to raw materials. The smelter takes production further down the processing chain, but refining PGMs for market is still done in South Africa.
Experts have said Zimbabwe does not have the scale of production to justify a refinery, but in 2018 Chitando said platinum producers in the country planned to jointly develop a base metal refinery in the country.
Zimplats, Unki and Mimosa Mine had “come up with a joint plan to set up a base metal refinery,” Chitando said last November, although he admitted that no feasibility study had yet been done.