Golden Sibanda Senior Business Reporter
MINES and Mining Development Minister Walter Chidhakwa has demanded a credible and compact presentation on platinum miners’ plans to set up a platinum refinery in the country.Minister Chidhakwa said yesterday that he was still awaiting a detailed account of the platinum refinery plans from the miners showing the amount to be invested and the dates on which they will be implemented.
“I am still waiting for them to give me a detailed presentation of their plans because the first one was not compact, it was not credible. I want a credible presentation,” the mines minister said.
“I want (detailed) presentations on the amount of (planned) investment and dates of implementation,” he said.
Various figures running into hundreds of millions have been bandied around in terms of the amount required for the base metal refinery, with Zimplats saying that refurbishing its BMR may cost over $100 million.
Zimplats is Zimbabwe’s biggest platinum group of metals miner. It has committed to refurbish its mothballed base metal refinery and pledged to expand and turn facility into platinum refinery later.
Finance Minister Patrick Chinamasa in January introduced a 15 percent levy on exports of unbeneficiated platinum in an attempt to nudge the producers into establishing a refinery in the country to optimise returns.
But platinum mining companies have complained in recent months that the levy was affecting the viability of mines. However, Government has held its ground, vowing to maintain the tax until the refinery is done.
Zimbabwe has three operational platinum mining companies namely Implats-owned Zimplats, Implats and Aquarius’ 50-50 joint venture, Mimosa and Anglo American-controlled Unki.
The country has the world’s second biggest known deposits after world number one producer, South Africa, where its sends its raw exports for refining.
The levy was a way of punishing the platinum producers compared to plans ex-mines minister Obert Mpofu had earlier hinted on when he threatened a total ban on the export of raw platinum. Between them, platinum and gold account for roughly half of Zimbabwe’s total annual exports.
Unfortunately for the miners, the imposition of the tax by Government coincided with a period of falling platinum prices on global markets, which might see firms putting expansion on hold.
Prices of platinum have fallen below $1 100 per ounce, levels last seen around 2009 on falling demand from major automobil producers abroad, especially China, who use it in vehicle catalytic converters.
By enforcing the export levy, Zimbabwe is not the first country to attempt to whip miners into establishing refinery facilities to value-add minerals, the most recent being nickel exporter, Indonesia.
In January last year, Indonesia introduced a ban on the export of raw minerals, creating a great deal of anxiety in the international mineral markets. Indonesia’s nickel exports may not resume in five years.
Before the ban, Indonesia was the world’s top nickel ore exporter and the largest bauxite supplier to China, accounting for around 12 percent of the global market in export of both minerals.
Based on Indonesia’s government regulation No. 1 /2014, the policy to ban raw material exports is designed to develop higher value-added downstream industries than export raw platinum and lose other attendant value benefits.
Subsequently, as part of the mining law, as highlighted in the Indonesia’s regulation, companies are required to develop downstream refining and processing industries within Indonesia.
This is aimed at generating more benefits of mining wealth to the nation. And in keeping with the spirit of the African Mining Vision and Agenda 2063, Zimbabwe adopted a similar policy.
Local producers, who together produce about 430 000 ounces of platinum, have preferred various excuses for delaying a platinum refinery including; the economics of it (volumes and energy supply).
Zimbabwe and other African resource rich countries are often been ridiculed with the resource curse paradox of mineral abundance, but characterised by widespread abject poverty.