ZIMBABWE – THE Chamber of Mines of Zimbabwe has said there was as yet “no economic sense” in establishing a platinum refinery plant in the country due to the low volumes being produced.
Chamber president Mr Winston Chitando spoke at the fourth edition of the three-day Zimbabwe Mining Indaba in Harare yesterday.
But that position was likely to set the chamber on a collision course with Government, which is insisting on local value addition of minerals to maximise returns from the resources.
“Volumes being mined are still very low and that refinery would go bankrupt. As volumes go up, there is scope for establishing one. We are currently engaged in talks with Government on the setting up of a refinery, but the main thing is the issue of volumes,” said Mr Chitando.
Vice-President John Nkomo officially opened this year’s indaba, whose theme is “Making it happen in the mining sector in Africa”.
Zimbabwe has projected 12 940kg of platinum this year and 21 000 tonnes in the event it obtains funding to support operations. Mr Chitando said the mining industry required between US$5 billion and US$7 billion fresh funding over the next five years to recapitalise operations, with the platinum sector taking US$2,8 billion.
Currently, Zimbabwe’s platinum is processed in South Africa amid concerns that significant value added externally was being lost. Zimbabwe has three platinum companies — Zimplats, a unit of Impala Platinum, Mimosa Platinum, a 50-50 joint venture between South Africa’s Impala Platinum and London-listed Aquarius Platinum, and Unki Platinum, a 100 percent-owned unit of Anglo American Platinum.
Zimbabwe has several mutating platinum projects yet to come into operation, as it bids to fully exploit its huge reserves, the second largest in the world after South Africa.
Platinum Producers of Zimbabwe chairman, Mr Herbert Mashanyare, said besides the issue of volumes, there was also availability of electricity to be addressed, among other issues.
“As the Platinum Producers Association of Zimbabwe, we have engaged the Government. It will cost a minimum of US$2 billion to set up a (platinum) refinery plant,” said Mr Mashanyare.
But Botswana has taken the same stance as Zimbabwe’s to ensure value addition before exporting. It is halfway through the process to make the Diamond Trading Company relocate to Botswana.
Mines and Minerals Development Minister Obert Mpofu said Zimbabwe’s mining industry presented extensive and unique opportunities through exploration, processing and marketing. Government was presently working on amendments to the Mines and Minerals Act and a Zimbabwe diamond policy to enhance the investment climate in this key economic sector, he said.
The mining sector continued to contribute significantly to the growth and development of the economy, Minister Mpofu said.
Mining had contributed 60 percent to export earnings and 13 percent to Gross Domestic Product last year.
“The prevailing stable economic environment since the introduction of the multicurrency system and the liberalisation of the gold subsector since 2009 continued to drive the viability of the local mining sector,” he said.
In view of the centrality of mining to the economy, Government reviewed mining administration fees and levies to encourage investment and open up ground for exploration. The Government was also working on the “operationalisation” of the Mining Promotion Corporation, national exploration firm, to complement the private sector in new mineral discoveries.