ZIMBABWE’s second biggest platinum miner, Mimosa Mines, has implemented a raft of measures including slashing salaries as part of a cost cutting strategy.
The platinum miner has suffered from the continued plummeting of platinum prices on the world market from a peak of $1,700 per ounce to an average of $950 per ounce currently being fetched for the white metal.
In 2014, Mimosa embarked on a labour rationalisation exercise where it retrenched 100 workers in an effort to streamline its operations in light of falling metal prices.
Fungai Makoni, the company’s managing director, told Chronicle Business the company has slashed salaries across the board and reviewed contracts with service providers among other measures to sustain operations.
“World metal prices are beyond our control and what’s within our control is the cost management and the efficiencies. We’ve done a lot in terms of cost containment in order to mitigate against the low metal prices,” said Makoni.
“This has seen us remain viable as a business. The challenge continues because the prices remain soft and we need to be focused on cost containment and production efficiencies. We’ve had to reduce our wage bill and a number of initiatives in terms of how we procure among other measures.”
Low platinum prices saw Mimosa revenue dipping by 32 percent to $99 million in the half year to December 2015. This also saw the mine’s production decreasing by six percent to 1,238 million tonnes.
However, the Zvishavane-based miner’s production in the period under review went up two percent to 60,214 platinum group metals (pgm) ounces, compared to the previous comparable period. Last year, Shurugwi based platinum miner, Unki Mines, asked its suppliers to cut prices by between five to 15 percent in response to the depressed base metal prices on the international market.