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Impala in R1.7bn Zim expansion
David McKay
Posted: Thu, 01 Jun 2006
[miningmx.com] -- IMPALA Platinum is to invest R1.7bn ($259m) in Zimbabwe and nearly double platinum production from the country in a first phase expansion programme following an agreement with the Zimbabwean government that settles a long-standing empowerment dispute.
The Zimbabwean government said earlier this year that it was seeking 51% control of mining properties within its borders, part of which would be sold to local firms it nominated. The ‘empowerment plan’ had been met with resistance by the private sector and Zimbabwe’s chamber of mines.
As part of its investment, made through 86.9% held subsidiary Zimplats, Impala will dig a new open cast mine, simultaneously develop two new underground mines at Ngezi, south west of Harare, and build a new concentrator, also at Ngezi.
In return, Impala will part with 36% of its 140.8 million ounces owned by Zimplats to the
Zimbabwean government. “The contained metal in the ground to be released is 51 million ounces of platinum or 99 million ounces of 4E (platinum, palladium, rhodium and gold),” Impala said in an announcement to the JSE.
The released ground is outside Zimplats’ long-term expansion programme of 1 million platinum ounces a year over a fifty year life of mine, it said.
In addition, Zimplats will be awarded an empowerment and cash credit of $153m for the release of the mineral bearing ground. This has been calculated using the weighted average price of Zimplats shares during a 30-day period, multiplied by shares in issue.
The agreement also provides for all remaining claims retained for the long term expansion to be incorporated into the special mining lease regime that applies to Zimplats’ current operations, the company said.
Robert Mugabe, Zimbabwean president, is expected to tour the Zimplats' operations today and meet with Impala CEO Keith Rumble,
and David Brown, the financial director.
The first phase expansion will see Zimplats increase platinum output to 160,000 oz/year from the current 90,000 oz/year.
Impala said in its last annual report that there was further potential to expand production to 450,000 oz of platinum annually, nearly half of its current total output. The company had approved. In its last financial year, Impala and Zimplats and approved an expansion of a trial underground mine at Ngezi at a capital cost of $46m.
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