INTERVIEW: Blessed Mhlanga
GOVERNMENT recently announced plans to repeal the indigenisation policy in the platinum and diamond mining sector in an effort to give impetus to the ‘Zimbabwe is open for business’ mantra.
NewsDay (ND) senior reporter Blessed Mhlanga recently had an interview with platinum producer Zimplats managing director Stanley Segula (SS) on how this affected their operations. Below are the excepts of the interview:
ND: Government spoke about the removal of 51:49% ownership threshold on platinum mines, saying you can now own as much as 100% of the operations, how does this affect your operations?
SS: Obviously, it will be positive; there is no doubt that some level of indigenisation has to happen or some participation by locals has to happen. We have been engaging the government over our own model. The possibility that the ratio can be adjusted is a good development, but there is no doubt, indigenisation or local participation is a necessity.
ND: Given this, do you have any expansion plans or new investment coming directly as a result of this policy shift?
SS: For now, there is no significant discussion on expansion. What we are doing at the moment is more of projects which are related to maintaining our current production capacity. At the moment, we are undertaking what we call the Mupani Mine development at a cost of US$265 million which is a massive project which we are currently steaming ahead on.
ND: You talk of maintaining the current level of production; what capacity are you operating at?
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SS: Currently, we are sitting at around 270 000 platinum ounces per annum. I am talking platinum, but as you may be aware we also extract another nine metals, including palladium currently which is fetching a higher price than platinum. Platinum is sitting around $900 and palladium is about $1 600 which is double. So, we market a total of 10 metals.
ND: And your employment levels, where do you stand?
SS: Total is about 6 000, including contractors.
ND: Because of the indigenous policy, there were fears that you had increased your exposure and that you could disinvest from the country, are these still fears still founded?
SS: Well, I think those fears probably are unfounded as you can see. As a company, we are still steaming ahead. We will continue to invest and continue to replace mines which means we are steaming ahead with business.
ND: There is this talk of beneficiating platinum in the country, are you doing anything towards that?
SS: Yes, we are. As a company, we have started on our own facility, but that project has been overcome now by the need to look at an industry or country level facility and that engagement is currently taking place with government and other platinum miners.
ND: How soon could this be realised?
SS: The timeline is something I might need to check with the platinum producers committee who are directly engaging with the government, where we are in terms of timelines, but it is a very important project.
ND: There are other players that have been coming in, do you feel threatened?
SS: We don’t feel threatened, we have been in this game much longer. We have played it longer than the rest and I think that experience really helps us. We are quite competitive, not only locally, but globally. So we don’t feel threatened.
ND: You have been involved in a lot of rescue operations from Battlefields mines and now you are coming in because of Cyclone Idai. What motivates you as Zimplats?
SS: As Zimplats, we understand that we thrive from the community in which we operate. We do not live in isolation, so we create value and we have to share value. This is one way in which we have to share value which we create. And also as a company our core value is safety. You will see that from our safety performance, we are now a benchmark operation where our safety performance globally is rated one of the best. Actually, we have been invited everywhere to go and share with others the road we have travelled to the levels where we are. So obviously, as a company which values safety and when our colleagues are befallen by catastrophes we have no option, but to react because that’s what we believe in, saving lives.
ND: Do you have major challenges that you want to highlight in terms of your operations?
SS: At the moment, no significant challenges. Obviously, we are aware of what is happening on the economic front, we are watching how prices are behaving, but as a business, we will continue to move forward.
ND: Mining companies have complained in terms of access to foreign currency. Are you affected by this?
SS: To a certain extent, yes, but we are also happy that we have been allowed through the monetary policy to retain a certain percentage of foreign currency, currently sitting on 50%. The conversation becomes: Is it enough? We would love to retain more from the studies that we have done, but generally, it’s an area which I believe more conversation is actually required.
ND: Workers have been hard-hit in terms of erosion of value of their salaries and wages because of the RTGS$ that took a knock. Have you done anything to cushion them?
SS: Obviously, I think our employees are the most valuable asset and we have to continue looking at what is happening and make sure that we protect their interests.
ND: How have you protected them? What have you done so far?
SS: So far, I think we are comfortable. We are quite competitive in what we do, but we will continue to scout other ways of ensuring that our employees’ earnings are protected.
ND: There is a disaster possibly waiting to happen at Zimplats, we hear that there are about seven families settled in the path of a dam with toxic chemicals at your Selous plant, how did they come to be in that area?
SS: We have got seven families who were legally settled in that area, but over the years, other families, I think about 23, have moved into that area and made homes. From the outset, as a company, we had lodged a complaint about resettling of people in that area considering that we wanted to put up a facility in the area which has got the capacity to endanger people downstream. Over the years, we have been in conversation with the government to get them relocated to a safe area and we have made significant progress. We are prepared to fund the relocation of those families.
ND: What is a tailing dam?
SS: Well, a tailing dam is when you mine rocks then you push them through a processing plant and you get the valuable minerals. The waste – what is called the gang material –which is what you do not want, you go and impound it into an area which forms what we call a tailings dam – it’s like a big dam full of waste materials of a fine size.
ND: So these people are located in the foot of this dam wall?
SS: Yes, in the path. What we have done using our consultant is that we have mapped the course that in the eventuality that this dam runs, what is the course it will follow. So, anyone who sits in that path we say they are seating in the zone of the influence of that facility.
ND: So what is the danger that it poses to the families?
SS: The danger is that if there is, say, some of these natural disasters or increased rainfall, the stability of the facility gets affected. For instance, if there is too much rain the stability of the walls gets affected and it can result in this facility running away in what we call dam run and normally that can be catastrophic.
ND: You said there are fine particles, are there any chemical threats that are there even without the dump run?
SS: This is something which we monitor because in terms of our dump management processes and the design, all those chemicals are supposed to be collected into a collection point. We do sampling before any discharge can actually be done. We condition the discharge, but when this run happens, it is uncontrolled which means there is also exposure to conditions or chemical conditions, but moreso it’s the safety impact of people being run over or submerged or washed away. I think that is of major concern.
