Huge Jump in Revenue for Zim Platinum Producer

Revenue generated for the last three months of last year amounted to US$60.67 million, up from US$38.57 million in the previous quarter due to improved production and deliveries of matte from the processing of concentrates that had been stockpiled during a furnace re-line. Platinum group metal and gold sales rose to 47 516 ounces from 34 049 ounces over the period. Zimplats is majority owned by South Africa’s world number two producer, Impala Platinum Holdings Ltd. But increased revenue also meant the company’s operating costs surged 54 percent on the previous quarter, mainly due to Zimbabwe’s spiraling inflation, which is the world’s highest even officially at 26 000 percent, according to figures released yesterday by the central bank. “Costs for the period were negatively affected by high fuel prices, an exchange rate that did not adequately reflect the prevailing rate of inflation as well as an increase in the electricity tariff,” the company said. The country’s top miner registered a healthy 62 percent jump in operating profit due to the continued rise in platinum, rhodium and gold prices on the world market. But Zimplats said it remained concerned by acute power cuts experienced in the country, which have worsened since the start of the year and is blamed on a serious economic meltdown mainly blamed on President Robert Mugabe’s rule. Since the end of the quarter, operations have been adversely affected by power outages which resulted from problems within the power supply network in the sub-region,” Zimplats said. “Although these problems have been resolved for now, management remains concerned about the ongoing power generation and transmission difficulties and the possible impact on operations.” Power cuts are one of a myriad problems threatening the future of Zimbabwe’s lucrative mining industry, not least plans by Mugabe’s government to force foreign-owned mining firms to transfer majority stake to local blacks, including a free 25 percent stake to the state. A draft government Bill to force share transfers tabled in Parliament last December lapsed after the House adjourned without passing the proposed law. However, if Mugabe’s government is re-elected in March – as is most likely – it could still re-introduce the Bill in Parliament.