Platinum price crash: Implats postpones base metal refinery, solar plant and other Zimbabwe projects

Zimplats: Falling platinum prices force project delays (pic: Scotty Photography)

Impala Platinum (Implats) is delaying projects in Zimbabwe, including a base metal refinery and a 185MW solar plant, in response to falling platinum prices.

In 2021, Impala’s Zimbabwe unit Zimplats announced a US$1.8 billion expansion plan, the single largest investment commitment into Zimbabwe in years. But Implats now has to delay some of the projects after falling prices cut group profits by 88% in the December half year.

“At Zimplats, the implementation of the sulphur-dioxide abatement and smelter expansion project was rationalised to manage cash constraints. The execution of the Selous Base Metal Refinery (BMR) refurbishment was deferred. Further phases of the 185MW solar project have also been postponed,” Implats reported on Thursday.

The sulphur-dioxide plant will now only start in 2028. The base metal refinery project, says Implats, has been “deferred to outside the five-year planning window”. A new smelter will be completed at Zimplats in May. After that, the company will slow down spending. “Post the new smelter commissioning at Zimplats, plans to slow future growth capital will see the asset revert to free cash flow generation.”

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Projects to develop new mines at Zimplats continue. However, Implats will no longer spend money to increase mining at Mimosa, which the company jointly runs with Sibanye-Stillwater, which expects a 91% drop in 2023 earnings for its operations.

In 2022, Mimosa executives said they planned to spend up to US$100 million to develop new mining areas. Its current mine site, called South Hill, will run out in under ten years. Mimosa had planned to develop a new area, called North Hill. This is now off the table.

“The North Hill life-of-mine extension at the Mimosa JV was not approved by its respective shareholders,” Implats says.

Nico Muller, Implats CEO, said the group may shut down loss-making mines elsewhere in the group. These steps had to be made quickly, he said. “I don’t think that we’ve got the luxury of taking two years to make these decisions,” Muller added.

Platinum prices are falling around the world due to a slowdown in demand from China and weaker palladium sales to car makers.

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