HomeBusinessDepressed sales volumes: Zimplats records drop in profit

Depressed sales volumes: Zimplats records drop in profit

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ZIMPLATS Holdings Limited (Zimplats) profit dropped by 88% to $3,9 million from $32 million for the six months ended December 31 2014 due to a decline in sales volumes.

BY VICTORIA MTOMBA

The company recorded a 12% decline in revenue to $233, 5 million during the six months from $266 million. A decrease in platinum in converter matte sales volumes was recorded at 103 092 ounces from 113 876 ounces amid lower metal prices.

The company is expected to begin open pit mining to supplement ore supply to the processing operations.

“In an effort to further ameliorate the impact of closing Bimha Mine, the board has approved the initiation of further contracted open pit mining to supplement ore supply to the processing operations. First production is expected in the fourth quarter of the year ending June 30 2015.

During the six-month period studies by internal and external experts were further advanced to fully understand the nature of the ground collapse and structural geological settings.

“Following a detailed risk assessment, the board initiated the redevelopment of Bimha Mine which commenced in December 2014 with two mining fleets deployed to re-establish reef access. No significant further ground movements have been observed and management continues to closely monitor the situation,” the company said.

The company said total operating costs excluding the Bimha write off decreased by 7% to $206,3 million mainly owing to lower production.

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

On the group capital projects, Mupfuti Mine development, which was part of phase 11 project, remains on track and the project completion was expected in 2015.

“In line with the Zimbabwe Agenda for Sustainable Socio-Economic Transformation [Zim Asset] and the government of Zimbabwe thrust on beneficiation, the group made strategic decision to refurbish and commission the mothballed Selous Metallurgical Complex Base metal Refinery (BMR) 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 to be completed by June 2016,” the company said.

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