Oliver Kazunga, Acting Business Editor
THE world’s second largest platinum producer, Impala Platinum, says there was an improved policy certainty in Zimbabwe and South Africa’s mining sectors last year and this is a right move in luring investors.
Locally, the Johannesburg Stock Exchange-listed firm owns the country’s biggest platinum miner, Zimplats in Mashonaland West and Mimosa Mining Company in the Midlands.
In its 2019 integrated report, Impala Platinum (Implats) noted that the socio-political context in Zimbabwe and South Africa remains dynamic as there has been “considerably” more regulatory certainty compared to prior years.
“The socio-political context in the countries in which we operate – South Africa and Zimbabwe – remains dynamic. There is considerably more regulatory certainty in both jurisdictions than in prior reporting years.
“Mining Charter III has provided a level of certainty in some aspects of South African mining policy, while in Zimbabwe the indigenisation policy has been relaxed,” said the mining group.
Since the coming into power of the new political order in November 2017, the Government has pledged to attract foreign direct investment through embracing the necessary economic reforms.
Last year, the Government scrapped the 51/49 percent shareholding threshhold for platinum and diamond mining to allow investors to own 100 percent of any business in the sector.
Prior to liberalisation of all mining investments and the scrapping of the indeginisation regulations, there have been concerns that the policy caused bottlenecks which were a headache to many investors under the former President Mugabe era.
“In Zimbabwe, the relaxation of the indigenisation policy has encouraged some investment inflows, while a proposed 15 percent tax on unrefined platinum exports was suspended until the end of 2022.
“In addition, during financial year 2019, Zimplats operated for its first year under the conditions of new converted mining rights and normalised tax provisions,” said Implats in the 2019 integrated report.
The Government suspended plans to effect a 15 percent tax on raw platinum exports by January 2022 following a commitment by platinum miners to set up credible refinery plants and capital inflows within the sector.
In the past, Zimbabwe intended to introduce a 15 percent tax on raw platinum exports to compel mining firms to promote beneficiation of the mineral as it had been noted that the country was losing a lot of revenue through exporting unprocessed platinum.
Following Government’s call for platinum producers to promote beneficiation, platinum miners, Unki, Mimosa, and Zimplats agreed to set up platinum refineries at their respective mining sites while at the same time pooling resources together to construct a bigger processing plant at Zimplats in Mhondoro-Ngezi.
In the 2019 integrated report, the mining group said:
“Implats has established good relations with the South African government, and mining companies, working through the industry association, Minerals Council South Africa, are engaging in constructive dialogue to come to mutually beneficial outcomes in terms of sticking points in Mining Charter III.”
It said it remains committed to collaborating with all stakeholders to ensure an attractive and sustainable industry.
“We fully support the South African and Zimbabwean governments’ aspirations to grow and transform their mining industries.
“We continue to engage at all levels in both countries to encourage the growth and predictability necessary to ensure Implats continues its significant contribution to economic growth in South Africa and Zimbabwe,” said Implats.
On the outlook, Implats said Zimbabwe and South Africa have seen positive legislative changes during the year under review and it had meaningful and fruitful dialogue with leaders in the two countries.
“However, the economic crisis in Zimbabwe, together with muted economic prospects for South Africa, have implications for companies operating in both countries,” said the mining group.
Meanwhile, in the quarter ended December 31, 2019, Zimplats’ six elements (6E) production was 115 908 ounces reflecting an 18 percent decrease if compared to the same period in the prior year.
The 6E are platinum, palladium, gold, rhodium, ruthenium and iridium. – @okazunga.