[miningmx.com] – AQUARIUS Platinum may be on a collision course with Zimbabwe’s government after it failed to provision investment for a platinum group metal (PGM) refinery in the southern African country.
“Mimosa is not itself engaged in planning a refinery of its own,’ said Aquarius spokeswoman, Janet Whitaker said in an e-mailed response to questions.
“Given the current size of Zimbabwe’s PGM sector, it would seem to make sense to collaborate with a refinery serving others as well as Mimosa,’ she said. “That would lead to economies or efficiencies of scale.’
President Robert Mugabe’s government wants platinum miners in the country to set-up PGM refinery in double-quick time as a means of generating more margin from its mineral resources and bolster the fiscus.
Only this week, the Zimbabwean government passed a bill for the creation of a Sovereign Wealth Fund, an entity that will draw contributions from mining royalties.
However, the depressed state of the platinum market will make the economies of scale required to build a smelter in Zimbabwe tough for platinum producers to approve, especially as expansion of the mines required to fill such a smelter are proving hard to justify.
So far, Impala Platinum (Implats), which controls’s Zimplats and is a joint venture partner with Aquarius in Mimosa, is the only miner of the precious metal in Zimbabwe that has invested into a refinery facility.
Anglo American Platinum (Amplats), the 80%-owned Anglo American listed subsidiary, and which controls the Unki mine in Zimbabwe, has said Unki’s output is insufficient to justify the building of a refinery.
During the full year period to the end of June, Mimosa produced 221,358 ounces of PGMs. Although it produced 60 000 ounces in the fourth quarter, executives at Aquarius said that this production is “not sustainable with the mine’s current plant and equipment’.
Consequently, production for the current financial year is not expected to be above 240,000 oz.
Both Impala and Aquarius view Mimosa as a long term operation as the mine is pursuing an expansion strategy to expand its life of mine to 20 years.
Initially, Mimosa executive chairman, Winston Chitando had said that expansion of production would be undertaken through a second shaft at the mine, but this has now been shelved.
Aquarius said “various options have been considered and while access was initially planned via a new decline shaft and accompanying infrastructure, alternative, cost effective access is being considered from the existing decline shaft”.
This will entail “on-reef development,’ an exercise that will cost both Impala and Aquarius about $40m over a period of five years. In the past four years, Aquarius had invested $90m into Mimosa mine.
An additional mill, upgrade of the crusher as well as a ventilation upgrade are some of the major projects that the mine will invest in towards the expansion programme.
Financing a smelter in addition to these mine developments, particularly as analysts think that the platinum market may not recover for between 12 to 18 months, seems a distant dream.
