By Ndakaziva Majaka
Zimbabwe’s largest platinum producer, Zimplats, says it is in discussions with government over an impending compulsory acquisition of 28 000 hectares of its land by the State.
The Alex Mhembere-led platinum mining company yesterday said while government had already made moves to grab the land and use it “for the benefit of the public,” the group was still engaging the President Robert Mugabe-led administration over the issue.
“… The operating subsidiary lodged an objection to the proposed compulsory acquisition. The operating subsidiary is, however, currently engaging the government of Zimbabwe on the matter,” Zimplats said in a notice accompanying its results for the quarter to March 2017.
In January, government issued — through a Government Gazette — a preliminary notice giving fresh notice that it intended to compulsorily acquire the land located within Zimplat’s special mining lease area.
Ignoring various warnings from market experts that the move will put investment-starved Zimbabwe on a collision course with foreign investors, Mugabe’s government repealed all previous notices issued in respect of its proposed compulsory acquisition of the land, unleashing a fresh threat to the miner.
This is despite the fact that Zimplats — majority-owned by South Africa-based Impala Platinum (Implats) — had filed opposing papers urging the courts to throw the case away on a technicality.
Zimplats contends that, under the 2006 release of ground agreement, “it was accepted by both the government and Zimplats that the ground that Zimplats remained with was required by Zimplats to achieve its expansion objectives.”
However, government has completely ignored this, threatening the Australia Stock Exchange-listed company about impending expiry of the miner’s 25-year special mining lease granted to its successor BHP Minerals Zimbabwe in 1994.
The 28 000 hectares has been lying idle for years and government intends to acquire and re-allocate it to prospective miners who are keen on extracting platinum for the country’s economic growth.
Market watchers say it is this treatment of a firm that has spent nearly $4,6 billion — $533 million of this in taxes and royalties — in the country since 2002 that will spook many investors.
Meanwhile, Zimplats realised $21 million from the disposal of $34 million Treasury Bills (TBs) received in settlement of a debt owed by the central bank.
Its revenue for the three months decreased six percent to $131,2 million from the previous quarter mainly due to lower 4E metal sales volumes while profit for the quarter after royalties surged 105 percent to $42,2 million.
The redevelopment of Zimplat’s Bimha Mine remains on schedule to reach full production this month.
“A total of $32 million had been spent on the project as at March 31, 2017 against an approved total project budget of $92 million.
“The development of Mupani Mine (replacement mine for Ngwarati and Rukodzi mines) is on schedule targeting to reach the ore contact by May 2020 and full production in August 2025.
“A total of $8 million had been spent on the project as at March 31, 2017 against an approved total project budget of $264 million,” the company said. Daily News