‘$2,8bn needed to boost platinum production’

An injection of $2,8 billion into the platinum sector will see output rising by more than half to 20 tonnes annually in five years, Platinum Producers Association chairman, Winston Chitando says.

BY FIDELITY MHLANGA

Chitando

Speaking at the Chamber of Mines annual general meeting in Victoria Falls last week, Chitando said of the required amount, $1,6 billion was for increasing production, while $1,2 billion was sustenance capital.

He said with the vast platinum reserves, the sector has a potential to increase platinum output by from about 13 tonnes, to 20 tonnes by 2020 and 26 tonnes by 2025.

“If we incorporate current projects and potential new entrants [GDI and global platinum] output could surge to as much as 30 tonnes by 2025. Mirroring growth in output, platinum annual revenue could increase to about $1,2 billion by 2020, and $1,6 billion by 2030, to become the single largest source of exports in Zimbabwe,” he said.

Chitando, who is also executive chairman of Mimosa Mining Company, said platinum sector, employed about 10 000 at the end of 2015, representing about 25% of total formal mining employment.

Since each job creates three additional jobs in the value chain, the platinum sector has generated about 40 000 jobs on the mineral value chain, he said.

“The social impact of platinum is very high, and given Zimbabwe’s dependency ratio of 8:1, it means about 320 000 people directly depend for daily food on the jobs created by the platinum sector,” Chitando said.

He said power shortages should be addressed in light of beneficiation and value addition, with the cost of power being rationalised.

Chitando said there was need to address skills relevance in light of beneficiation and value addition and enable the fiscal policy framework.

The sector directly accounts for 3,5% of GDP, which increases to 6,4% with multiplier effects.

Platinum output has been increasing since 2002 when Zimplats and Mimosa resumed operations and the subsequent entry of Unki in 2010 added further impetus for increased output.

The platinum sector is one of the few that survived the hyper-inflation crisis that reached a crescendo in 2008, where the rest of the mining sector recorded significant declines in output.

The platinum mineralisation of the Great Dyke constitutes a major world PGM resource, estimated at 4,4 billion tonnes, positioning Zimbabwe as the world’s second largest PGM resource after South Africa, and contributing 6% of the world’s primary platinum production.

There are three existing players in the platinum group metals industry in Zimbabwe, which are Zimplats, Mimosa and Unki.

Chitando said potential new projects include ENRC, Ruschrome (Rostec) and Zimari Platinum, which are listed as joint venture projects under Zimbabwe Mining Development Corporation.

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