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Zimplats in expansion power shock


Zimplats, the country’s largest platinum extractor, expects its power demand to surge 50% to 75 megawatts (MW), the size of a power station, on completing its $500 million phase 2 expansion project, scheduled to come on stream by 2013.

The project, which commenced this year after the company secured auxiliary offshore loan-funding, is seen driving platinum output higher to just under 300 000 ounces of the 4E metal from about 200 000 expected this year.

Zimplats head of corporate affairs Busi Chindove said the expansion project would stoke the miner’s power consumption to 75MW from 50MW at the moment.

“After phase 2 we anticipate Zimplats’ power consumption to increase to 75 megawatts,” Chindove said.

The Australia Stock Exchange-listed resources company is one of the local mining operations that have taken the initiative to deal with the critical challenge of unscheduled power cuts by Zesa, the country’s national power utility.

The miner last year sealed a public-private partnership deal with Zesa to construct a dedicated 330KVA power substation in Selous, where it is headquartered, to reduce downtimes.

The project, which came on stream in June, was constructed at an estimated cost of $25 million, shared between the two partners on a 60-40% basis.

Zimplats provided the financing, project management and construction, while Zesa played a prominent role in the project design and approval to ensure that the substation met set standards.

“Zesa will pay back 40% of the project costs by crediting Zimplats with electricity consumption equivalent to the cost of the actual infrastructure,” Chindove said.

“Zimplats will absorb the other 60% of the project costs.”

The Implats-controlled miner also partnered with Zesa to refurbish the Norton transformer and the National Control Centre under PPP arrangements.

Asked if the substation would guarantee uninterrupted power supply for the mine, Chindove said this would depend on the sustainability of Zesa’s generation capacity.

“Continuous power supply is a function of generation rather than transmission. Therefore the project enhances transmission and ensures consistent power supply unless there is a fault on the national grid.”

Zimplats operations include the Ngezi opencast and underground mines and the Selous Metallurgical Complex, where the concentrator and smelter are installed.

In a financial statement for the third quarter, Zimplats said operating profit for the group was 13% lower at $49 million compared to $56 million in the second quarter.

Revenue declined 5% to $110 million from $115 million in the previous quarter as sales and metal prices eased during the period.

Third quarter output increased 5% to 1 016 000 tonnes from 967 000 tonnes in June.

Concentrate metal content declined to 91 934 tonnes from 95 144 tonnes in June.

“Ore mined was 5% higher than the previous quarter reflecting the ongoing ramp-up of production at Bimha Mine,” Zimplats said in the statement.

“Ore milled was 3% lower than the previous quarter due to a seven days planned shutdown of the Selous Metallurgical Complex concentrator.

Bimha Mine is scheduled to reach full production of 2 metric tonnes per annum in May 2011.

“However, mine development is expected to be completed by end of December 2011 due to delay in the completion of the conveyor decline. There will be no overall impact on output.”

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