Siphakeme .Mnindwa
Nqobile Bhebhe, [email protected]
PLATINUM group-metals (PGMs) giant, Zimplats, says depressed global metal prices and increased capital investments impacted its fiscal contributions, which were around US$100 million in taxes in the 2024 financial year down from US$150 million in FY2023.
During the year, PGM prices remained subdued, resulting in Zimplats’ gross revenue per 6E oz declining by 25 percent to US$1 196 (FY2023: US$1 595).
As a result, the company’s turnover declined by 20 percent to US$767,1 million from US$962,3 million recorded last year.
Profit before tax declined by 87 percent to US$37,6 million from US$286,8 million achieved in FY2023, largely due to the impact of depressed metal prices on revenue.
According to Zimplats’ FY2024 annual report, Zimplats chairman, Professor Fholisani Sydney Mufamadi said the mining entity is committed to maintaining strong relations with Zimbabwe’s tax authorities.
“The decline in fiscal contributions in FY2024 is mainly attributable to the negative impact of depressed metal prices on the company’s profitability, coupled with increased capital investment,” he said.
He noted that despite challenges posed by the economic environment, the future of the firm is bright.
Prof Mufamadi said investment in capital projects during the year amounted to US$439,5 million, a 44 percent year-on-year increase, reflecting increased project activity.
Chief executive officer, Mr Alexander Mhembere, said expansion capital increased by 105 percent to US$199,2 million (FY2023: US$97,1 million) as spending on the smelter expansion and SO2 abatement plant accelerated, with a total of US$181,5 million spent on the projects in the period.
As at June 30, 2024, cumulative investment in the project was US$272,6 million, with a further US$114,1 million incurred on managing SO2 emissions from the existing smelting operations, he said.
“The full SO2 abatement project will manage both current and expanded smelter facilities at Zimplats, with spend allocated between expansion and SIB capital as a result.
“The new furnace will increase smelting capacity from the current capacity of 135 000 tonnes of concentrate (equivalent to circa 535 000 oz 6E in converter matte) to circa 380 000 tonnes of concentrate (equivalent to 1,1 million 6E oz in converter matte).”
During the year, US$15 million was spent on the project to refurbish the SMC Base Metal Refinery (BMR), bringing the project-to-date expenditure to US$28,4 million against a project budget of US$190 million.
The report notes that the first 35 megawatt phase of the 185MWAC solar project is scheduled for commercial power generation in the first quarter of this year.
This will go a long way in further reducing the company’s carbon footprint and complement national power generation efforts, a business imperative given the power deficit facing the southern African region.
Total ore mined increased by four percent to 7,9Mt, with higher production at Mupani and Rukodzi mines. Grade was adversely affected by the higher contribution of lower-grade development ore from Mupani Mine and dilution from mining across geological structures.
A total of US$81,6 million was spent on the replacement mines during the year, 12 percent less than the spend incurred in FY2023, with cumulative expenditure of US$407 million as at June 30, 2024.
The development of Mupani Mine, which replaces the depleted Rukodzi and Ngwarati mines, is progressing well and remains on schedule, with full production of 3,6Mt per annum planned for H1 FY2029.
