Zimplats spends US$304m on new projects in FY23, but lower prices hurt platinum sales

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

Zimplats spent US$304 million over the past year on new projects, part of its US$1.8 billion investment plan, but weaker global platinum prices drove sales down 23%.

The company increased its spending on capital projects by 13% in the year to June, as it increased mining and processing capacity, including a refinery.

In 2021, Zimplats announced it would spend US$1.8 billion to develop a new mine, Mupani, to replace Rukodzi Mine, which was depleted in June last year. Mupani will also replace Ngwarati Mine, which reaches the end of its life in 2025. The company has so far spent US$252 million on the new mine.

Zimplats has also spent US$28.7 million to upgrade Bimha Mine, which will partly replace tonnage from Mupfuti Mine, which will deplete in 2027.

With increased mining, the company is also expanding the processing side. The company has commissioned a third concentrator while an expanded smelter is due for completion next year. Zimplats is also investing in its base metal refinery, which will partly meet Zimbabwe’s desire for local processing of platinum.

“During FY2023, the board approved the US$190 million project to refurbish the mothballed base metal refinery at Selous. The project will enable Zimplats to refine a portion of its base metal production domestically,” Zimplats reports.

The company has, however, been hurt by weaker global platinum prices.

“Revenue decreased by 23% to US$962.3 million (FY2022: US$1.2 billion) as average US$ metal prices softened during the period,” Zimplats said. Profit after tax fell to US$205.5 million (FY2022: US$353.6 million).

Platinum prices were affected partly by fears that the EU would ban conventional cars in just over a decade. This move would slash demand for the platinum and palladium used in catalytic converters which help to cut vehicle emissions.

However, the World Platinum Investment Council (WPIC), which represents the world’s leading producers, in June forecast a platinum deficit this year, which would support price recovery.