Zimplats, the country’s biggest platinum producer, says its board has approved new capital investment worth US$1.8 billion in Zimbabwe, with US$1.2 billion already committed for implementation.
The investment will be spread out over the next ten years, starting in 2021, and involves the development of a new mine, expanding processing capacity and cutting emissions, Zimplats said in a statement on Monday.
Production capacity will be expanded from 6.7 million tonnes per year to 8.8 million tonnes per annum. The added output will mean expanding local processing capacity; the company plans to grow this to 380 000 tonnes of concentrate per year.
Zimplats will invest US$969 million into expanding capacity, developing new mines, and setting up a facility to reduce sulphuric dioxide emissions from current and expanded smelting capacity. The company is putting US$516 million into mine upgrades, and another US$100 million to bring the mothballed base metal refinery, which processes converter matte, back to production.
On power, Zimplats is investing in a 185MW solar plant at a cost of US$201 million. The company already uses hydropower mostly at its operations, but says adding solar is necessary to augment power supplies and enhance its environmental and social scores in line with the demands of its licence.
Zimplats: our own money
Zimplats is not borrowing to fund this expansion; it is using the profits it is making from the operation, a sign of how profitable the board expects the company to remain.
“These projects are expected to be funded by internally generated resources,” Zimplats said.
In the year to June, according to the latest financials, revenue grew by 56% to a record US$1.4 billion, as Zimplats benefited from firmer world platinum prices. As a result, profit after tax increased to US$563.1 million from US$261.8 million same time last year. The company ended the period with a cash balance of US$345 million.
In the year to June, Zimplats spent US$159.1 million on capital projects.
These included the redevelopment of Bimha Mine, on which US$100.3 million has been spent so far. Zimplats is also working on replacing Rukodzi and Ngwarati mines, which will be depleted in 2022 and 2025, respectively. The two mines are being replaced by the new Mupani mine.
Mupani and Bima will be further upgraded to replace Mupfuti mine, which reaches the end of its life in 2027.