Zimbabwe sticking to its guns on refineries

By Tawanda Karombo

Harare – The Zimbabwean government said last week it would not budge on its demand for Anglo American Platinum (Amplats) and other mining companies extracting the precious metal to build a refinery there.

Amplats, which owns the Unki platinum mine in Zimbabwe, has said that it has not yet reached sufficient production to justify building a refinery. This stance is set to put it on a collision course with President Robert Mugabe’s administration.

Zimbabwean government officials have previously rubbished the assertion, following representations by an association of producers in Zimbabwe, that production should first reach 500 000 ounces of platinum per year to justify building a refinery.

The country has the world’s second-largest platinum reserves after South Africa. It has three platinum mines, with the other two, Zimplats and Mimosa, owned by Impala Platinum (Implats) and Aquarius Platinum respectively. Russian investors recently commissioned a new platinum mine in Darwendale.

Mines and Mining Development Minister Walter Chidhakwa told last week’s mining conference in Harare that there was no going back on the government’s bid for enhanced mineral beneficiation, saying Mugabe’s administration was “passionately pursuing beneficiation and value addition”. He emphasised that a refinery was only “a means to an end”.

“A platinum refinery is a matter of great importance. This remains a major priority for us. We are not pushing for the refinement of platinum as an end in itself but as the means to an end,” he said.

He added that the country was keen to set up industries for “catalytic convertors” and stressed that “investors (need) to know that we will continue to work hard to ensure” a refinery would be built.

However, Amplats told Business Report in e-mailed responses that it was not yet pursuing building a refinery.

“Unki has not reached sufficient scale to justify the construction of smelting and refining facilities. Unki will continue with the completion of the remaining projects to bring its Phase 1 project to completion,” spokesperson Mpumi Sithole said.

In 2013, Unki produced 63 000 ounces of platinum and was planning to ramp up output to nearly 200 000 ounces by 2016, Walter Nemasasi told Bloomberg last month.

Sithole said Amplats’s Zimbabwe unit would “seek to explore ways to partner with other established producers who are developing such facilities” in the country.

Implats said recently that it was investing in the upgrading of an old refinery at the Selous Metallurgical Complex. However, the company said that the first phase would only treat feed from its Zimplats mine.

This effectively means that matte from Unki and Mimosa mines will not be treated at the refinery built by Implats, at least until Zimplats kick-starts the second phase of its refinery upgrading, an exercise that is still in the planning stage.

Government sources said the government, buoyed by new investments in the platinum mining industry, was sticking to its guns and would proceed with a ban on raw platinum exports if producers did not build a refinery that was able to treat all platinum produced in the country.

Mining houses were faced with fresh uncertainty recently after the government indicated that it was no longer going to pay for shares ceded to employee and community share ownership schemes as well as other black groups under the indigenisation policy.

However, Anglo Platinum insisted last week that the term sheet signed in 2012 “provided mechanisms for the settlement of the existing financial obligations of the Zimbabwean government to Unki”.

Zimplats and Mimosa have inked similar term sheets. IOL