Political climate fragile: Zimplats

Zimplats, which is owned by South Africa’s Implats the worlds second biggest platinum producer — praised measures implemented by President Robert Mugabe and Prime Minister Morgan Tsvangirais government to revive the economy that it said had seen an improvement in the operating environment for business. But the mining giant said the former foes still had much work to do to rescue Zimbabwe, adding that the success of the unity government was critical to any effort to revive the economy.

A coalition government of all three political parties with representation in the Zimbabwe parliament took office during February 2009. Although much remains to be done, potentially favourable policy changes have been initiated and pleasingly this has resulted in an improvement in the operating and living environment in the country, Zimplats chairman Mike Houston said in a statement.

Zimbabwes coalition government has managed to halt hyperinflation and unveiled several measures in a bid to revive the battered economy but a host of political problems including outstanding issues from the power-sharing deal threatens to derail the new Harare administration.

The political climate remains fragile and is only sustainable if all parties remain committed to the success of the coalition government and the required regional and international support is forthcoming, Houston said. Zimplats said the recovery of Zimbabwes shattered economy will also hinge on the international community honouring financial pledges made earlier in the year.

Zimbabwe has asked for US$8,3 billion from the international community to help rebuild the economy but only a trickle of this has been realised, mostly from neighbouring South Africa. Zimplats has major operations in the Ngezi District, about 140 kilometres southwest of Harare where it is undertaking a US$340 million expansion programme one of the largest investments to continue during the turbulent times.

Over several years, shareholders attention has been drawn to your boards deep concern about the difficult socio-economic situation that has prevailed in the country for the greater part of the past decade and its effects on the countrys infrastructure and the operations of your company, Houston said.

The company has successfully completed the majority of the Phase 1 expansion which will result in 88 percent increase in platinum production from 96 000 to 180 000 ounces per annum. Mugabe is expected to commission a new concentrator at the mines soon.