Over 33 managers lose jobs at Mimosa, US$100m expansion project on hold
Mimosa Mine, a major platinum producer in Zimbabwe, is feeling the pinch of a sharp drop in global metal prices which led to the company announcing a series of drastic measures, including the retrenchment of 33 managers and the shelving of a key expansion project, in response to the 35% plunge in platinum prices since April 2023.
“The outlook is that the prices will remain depressed in the medium term,” Mimosa stated, explaining the difficult choices they had to make.
“This has resulted in a staff rationalization exercise,” leading to the job cuts, alongside severance packages offered to affected employees.
The company’s ambitious plan to develop a new mining area called North Hill, estimated to cost US$100 million, has also been scrapped due to the financial strain. This project was intended to replace the aging South Hill area and secure the mine’s long-term future.
This news comes amidst broader industry struggles caused by the plummeting platinum prices.
Sibanye Stillwater, the South African co-owner of Mimosa, reported a significant loss of $2 billion in 2023, primarily due to the price drop impacting their American palladium mines. This sharp decline has entirely erased their previous profits from 2021 and 2022.
The CEO of Sibanye, Neal Froneman, warned that the company might face “further restructuring” if metal prices do not recover soon, as current trends threaten to squeeze earnings further amidst rising inflation.
The crisis in the commodities market has severe consequences for Zimbabwe, where mineral exports are crucial for generating foreign currency and servicing external debts.
Mimosa’s actions are just the latest example of how the global price slump is impacting the country’s mining sector, with other companies like Zimplats and Karo Platinum also forced to postpone expansion plans.
Zimbabwe’s booming lithium industry is also facing a downturn due to a sharp decline in global lithium prices. This has led to job cuts, with recent estimates suggesting over 1,000 positions could be lost.
The reasons for the decline include weakening commodity prices, rising geopolitical tensions and an unclear global economic outlook.
Lithium carbonate prices in China dropped from US$81,360 per tonne in November 2022 to US$20,782 currently, a 67% decrease.
Chinese refining companies are cutting production, while Zimbabwean firms are considering layoffs. Consequently, the price outlook for lithium remains bearish due to declining demand for electric vehicles, especially in China.
Despite having Africa’s largest lithium reserves, Zimbabwe’s industry is still under development and faces challenges like job insecurity and insufficient power supply.
