Zimbabwe Platinum Mines Limited (Zimplats) delivered an exceptional performance during the full year ended June 2011 posting a $200 million after-tax profit reflecting a 64% surge.
The period under review marked the first year of full production following the commissioning of Phase 1 expansion in the 2010 financial year.
Zimplats recorded a 3% increase in tonnes milled coupled with good grade control and improved concentrator recoveries that resulted in platinum in matte production improving by 5% to 182 100 ounces.
Unit costs rose by 16% to $1 171 per platinum ounce in matte due to a combination of internal inflation, the strong rand and higher maintenance costs at the Ngezi concentrator.
Zimplats holding company Impala Platinum Mines chief executive officer David Brown said Phase 2 expansion at Zimplats, which will increase production by 90 000 to 270 000 ounces of platinum in the 2014 financial year was on schedule.
“This was a positive year for Implats which delivered a solid operational and financial performance.
“We improved our gross production supported by our Rustenburg and Zimplats operations which achieved their targets,” said Brown.
“Costs were reasonably controlled given the cost inflation experienced by the industry whilst improved metals demand and US dollar pricing environments enhanced the solid operational performance. However, this favourable pricing environment was dampened somewhat by the strong rand.”
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In a statement accompanying the company’s financial statement, Zimplats chief executive officer Alex Mhembere said turnover for the year at $527 million was up 30% on the previous year’s $404 million, due to improvement in metal prices.
Total operating costs for the year, excluding share-based payments, amounted to $264 million, up 18% on the previous year’s $223 million. Profit before tax amounted to $236 million compared to $167 million for the previous year.
The tax charge for the year amounted to $36 million. “Profit after tax for the year amounted to $200 million reflecting a 64% surge on the $122 million registered the previous year,” said Mhembere.
Implats said global macroeconomy showed tentative signs of recovery in late 2009 and throughout 2010 adding that while developed markets remained under pressure, emerging markets continued to demonstrate strong growth rates.
Brown said Mimosa completed its second year of steady state throughput with platinum production in concentrate of 104 900 ounces however unit costs were adversely impacted by higher labour costs, materials usage and consumable costs as well as the influence of the stronger rand.
Unit costs per platinum ounce in concentrate rose by 15% to $ 1 377.
“Implats continues to invest in our future while maintaining a strong balance sheet and our strategy is firmly focused on organic growth and the delivery of low cost / high margin ounces.
“Mining is a long-term undertaking and requires capital expenditure to avoid reserve availability issues impacting on future production.
“The group is positioning itself to take advantage of the medium- to long-term fundamentals for our metals by ensuring a stable, long-term production platform.”
He said notwithstanding the macro challenges faced by developed economies, the resilience displayed in emerging markets should continue to drive demand for all commodities.
