No Official Word On Zimbabwe Land Grab, Says Implats
Harare, February 14, 2013 – IMPALA Platinum, the 87% owner of Zimplats, has had no official interaction with Zimbabwean authorities after the country’s mines minister, Obert Mpofu, said the government had “repossessed” 27,948ha of land from Zimplats.
Mpofu told reporters in Harare on Tuesday that land had been seized with immediate effect.
“We have received nothing official from the government of Zimbabwe vis-à-vis the comment…. We’re a bit in the dark about this and we remain in the dark around this,” Implats CEO Terence Goodlace told BDLive.
“We’d like to see the details of what was actually said,” he said.
Asked whether he had been able to speak to Mr Mpofu, Goodlace said: “No, we haven’t.”
Zimplats struck a conditional deal with the government in January to transfer 51% of Zimplats to black Zimbabweans. The conditions should be concluded by June, allowing for the finalisation of the R8.3bn deal. The land-grab comments therefore came as a surprise.
Mpofu also said platinum miners in Zimbabwe had to build a refinery in the country rather than producing refined platinum in South Africa, and he gave companies, including Zimplats, Anglo American Platinum and Lonmin a two-year deadline.
“We’ve said all along once there’s sufficient critical mass in the country, we could look at it,” Goodlace said. He has in the past said Zimbabwean platinum production needed to reach 500,000oz for a refinery to make economic sense. Zimbabwe currently produces about 360,000oz.
“One of the key constraints, as far as I’m concerned, is electrical power,” he said. “We’d be open to look at something in the future, probably on a collective basis, but my key question is where will the power come from.”
In interim results released on Thursday, Implats reported a R603m impairment charge, of which R550m was for the potential nonrecovery of a portion of the outstanding receivable amount from a recycling toll refining customer, it said.
In 2008, Implats’s advances to the customer were larger than the value of the metal delivered by the customer with the onset of the global financial crisis. This difference was converted into a loan, which had a long-term repayment profile.
“What’s been happening is the deliveries have dropped to the extent that the debt can’t be serviced. From a prudent perspective, like the potential of nonrecovery of what is still owing, we’ve taken that impairment,” said Implats chief financial officer Brenda Berlin.
Implats has not returned to pre-strike production levels after a large unprotected strike in February 2012.
Implats produced 368,000oz during the interim period and it has a further 22,000oz locked up in the processing pipeline.
“”We are not at pre-strike production levels. We are moving into a period of lower production in the second half of the year. Moving forward it’s going to be very tough for us,” Mr Goodlace said.
“We have ore reserve inflexibility and that is starting to impact us quite seriously in raising production levels to pre-strike levels,” he said.
Implats is issuing bonds of between $400m and $500m to fund its growth projects. It is building three new deep-level mines called shafts 16, 17 and 20 near Rustenburg.
“The book will be built throughout today and ultimately the proceeds will be used over the next two years to ensure we can continue to develop the 16, 17 and 20 shafts,” he said. “We are doing this primarily because of the operating environment in South Africa, the situation with profitability and that we’re at cash breakeven across the board and we don’t want to stop those projects,” he said. BDLive