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Alex Mhembere

Oliver Kazunga Senior Business Reporter
ZIMPLATS’ revenue for the half year ended December 31, 2014, decreased by 12 percent to $234 million owing to a decline in the mineral’s sales volume and low production.

In a directors’ report accompanying interim financial results for the six months ended December 31, 2014, Zimplats chief executive officer Alex Mhembere said revenue dropped 12 percent to $234 million from the same period last year.

He attributed the decline to a decrease in platinum sales volumes from 113,876 ounces to 103,092 ounces and lower metal prices.

“The collapse within a section of the underground working area of Bimha Mine triggered by the accelerated deterioration of ground conditions associated with the Mutambara Shear and the precautionary closure of Bimha Mine in August 2014 resulted in the damage and inaccessibility of certain underground infrastructure and equipment with a net carrying amount of $22.9 million, which has been written off during the half year ended 31 December 2014.”

He said an insurance claim was in the process of being finalised for associated plant and equipment, adding that any compensation received would offset the impact of the write-off.

Total operating costs (excluding the Bimha write-off) decreased by seven percent to $206.3 million mainly because of lower production.

Cash operating cost per platinum ounce produced increased by 10 percent to $1,481 million due to the impact of lower production volumes on fixed costs.

“Consequently, profit before income tax of $4.7 million was realised, 90 percent lower than $45.6 million achieved in the same period last year.

“The net profit attributable to members at $3.9 million was 88 percent lower than the same period last year of $32.2 million largely due to lower sales volumes and metal prices coupled with the Bimha write-off,” he said.

Mhembere said at the end of the half year, the group had bank borrowings of $105 million and a cash balance of $97.1 million.

“The bank borrowings have a final maturity date of December 31, 2017 with staged repayments. In January 2015, the group repaid $30 million and made a drawdown of $24 million on the revolving debtor discounting facility,” he said.

On capital projects, he said, Mupfuti Mine development, which was part of Phase II project, remains on track.

The project completion was expected this year.

“In line with the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset) and the government’s thrust on beneficiation, the group made a strategic decision to refurbish and commission the mothballed Selous Metallurgical Complex Base Metal Refinery at an estimated cost of $134 million.

“Orders for long lead items have already been placed and implementation of the project started in July 2014 and is expected to be completed by June 2016,” he said.

On indigenisation and economic empowerment, Mhembere said the platinum miner continues to engage with the government and stakeholders would be advised of any material developments.