Amplats to spell out plans for Zimbabwe PGM industry as high prices attract entrants

ANGLO American Platinum (Amplats) is to provide an update on its future involvement in Zimbabwe’s platinum group metal (PGM) industry when it announces its full-year results, scheduled for February 22.

“We are in a strategic position (in Zimbabwe) because processing of PGMs is a challenge for new entrants, and it is very expensive to do,” said Natascha Viljoen, CEO of Amplats.

Two companies have recently stated an interest in building new PGM mines in Zimbabwe amid increased enthusiasm for the metals. An increase in pricing, especially for rhodium and palladium, is based on market anticipation of increased demand for PGMs in the manufacture of electric vehicle batteries.

Great Dyke Investments (GDI), a company backed by Sotic International, is hoping to raise up to $550m for a new mine and concentrator in Zimbabwe. GDI’s chairman, former Impala Platinum (Implats) CEO, David Brown, recently said the company would supply concentrate to an established refining company in the country. Implats may be approached.

In November, a subsidiary company owned by Nigerian oil executive, Benedict Peters, said it was interested in building a $1bn PGM mine in Zimbabwe. It hoped to start in 18 months. A third company, the Johannesburg-listed Tharisa, has an option over PGM mineral rights in the country but is yet to provide an update on its plans.

There were concerns about the regulatory environment in Zimbabwe, primarily the confusion over its indigenisation policy. President Emmerson Mnangagwa withdrew the legislation – which required foreign investors to sell 51% of their operations in the country – until last month when an amendment indicated it was still current.

The Zimbabwean government clarified on February 2 that an amendment to its indigenisation law did not mean it had been reinstituted. “There are no minerals the extraction of which require a business extracting same to have 51% of its shareholding being owned by a designated entity,” it said.

Said Viljoen of Zimbabwe: “We are in constant engagement with the minerals council in Zimbabwe (Chamber of Mines of Zimbabwe). We want to keep a careful eye on developments so we minimise risk.”

Viljoen also promised to outline the group’s plans for the run-down of its PGM inventory, estimated to be about one million ounces. The group previously said it could take two years to run it down, but it sold more refined metal in 2020 than in its adjusted guidance.

The higher-than-expected sales “… represented a pull-forward of value through time on a refined inventory draw-down”, said analysts at RMB Morgan Stanley.