Zimbabwe 2008 platinum output to rise despite crisis

JOHANNESBURG (Reuters) – Zimbabwe, which has the second largest reserves of platinum after South Africa, is forecast to lift platinum output this year despite a political and economic crisis, a report said on Tuesday.

Johnson Matthey, the world’s top platinum refiner and fabricator, said in a review the southern African country is expected to lift platinum production by 5.9 percent this year to 180,000 ounces, outperforming its earlier predictions.

"Zimbabwe has seen quite a good performance in the platinum mines despite a difficult and challenging operating environment," David Jollie, a research official at JM, said.

A political crisis in Zimbabwe has deepened over a disputed presidential vote. The country also has the world’s highest inflation rate and is suffering from food, fuel and foreign currency shortages.

JM said despite these challenges output is seen rising by more than 10,000 ounces this year.

he world’s No. 2 platinum producer Impala Platinum (Impala), is the leading foreign investor in Zimbabwe’s mining sector, where it is expanding its joint venture operations.

Its bigger rival Anglo Platinum also sees Zimbabwe as crucial to its expansion plans, and is currently developing a new platinum mine in the country.

At Mimosa, a 50/50 joint venture between Implats and Aquarius Platinum, platinum production in concentrate fell 6 percent in the first half of 2008, mainly due to power outages and equipment failures at the mill, JM said.

But in the second half of the year, mining operations improved and the company had a large stockpile of ore, which should ensure higher platinum group metal output, JM said.

At Zimplats Holdings, in which Impala owns 86.9 per cent, production of PGM in concentrate fell by 9 percent to 94,000 ounces in the first half of this year, on lower mill output, falling grades and electricity shortages.

But production of platinum matte rose 6 percent to 54,000 ounces as Zimplats processed concentrate built up ahead of the smelter during a furnace re-line in 2007, JM said.

Despite power shortages, a lack of enough skilled labour and high costs of inputs, Implats has said it views Zimbabwe’s platinum sector as a "blue sky opportunity".

It plans to expand output to 100,000 ounces a year at Mimosa from 69,000 ounces currently, and to 160,000 ounces at the Zimplats operation, which produces 91,000 ounces a year.