REGIONAL bloc, the Southern African Development Community (SADC), has praised Zimbabwe’s decision to force platinum miners to establish refineries in the country, saying South African refineries currently treating the country’s matte are likely to become overwhelmed by their own production.
The regional body called on member States to exploit their vast mineral resources to expand their economies.
Three Zimbabwe platinum mines, Mimosa, Zimplats and Anglo Platinum, refine their platinum output up to a certain stage before shipping matte to South Africa’s Bushveld Complex for final processing.
Government has indicated its concern that continued exportation of semi processed platinum to South Africa was as good as exporting jobs by a country facing high unemployment levels, arguing that assembling local refineries would create jobs and improve revenue from exports through value addition.
But before they agreed to invest in local refineries, platinum miners had indicated that current production levels were not enough to warrant investment in refineries.
In its report, ‘Prospects for industrial transformation in SADC’, the regional bloc said the route taken by Zimbabwe was among the most viable for member States, who have been working towards value addition of primary products produced by various sectors.
“In Zimbabwe, the case for base metal and precious metal refining is overwhelming, especially given the vast PGM (platinum group metals) resources in the country,” the report said.
“It is clear that as production capacity continues to increase, the capacity of the refineries in South Africa will be saturated. For Impala Platinum, the Zimbabwean mines are relatively shallow, low cost operations run by a small, skilled workforce compared to their mines in Rustenburg in South Africa which are deep, high cost operations run by a large and not so skilled workforce that is increasingly militant.”
The Johannesburg Stock Exchange-listed Impala Platinum is the majority shareholder in Zimplats and a 50-50 shareholder in Mimosa and has big operations in South Africa.
SADC said the region had failed to exploit the huge location advantage of producing crude resources to establish resource-processing industries that could provide the feed stocks for manufacturing and industrialisation.
“Zimbabwe has taken a bold step towards this approach with the 2014 National Budget presenting these policy initiatives to unlock meaningful value and returns from the mining sector. These measures include the provision of a two year window for platinum producers expiring at the end of 2014 to invest in platinum refinery facilities, beyond which any failure to comply would result in a ban on raw mineral exports,” it said.
That window was, however, extended by government.
The three platinum mining firms, which produced about 365 000 ounces of platinum in 2014, first considered jointly building a smelter, a base metals refinery and a precious metals refinery.
But reports said last year that Anglo American Platinum was negotiating with the Zimbabwe Alloys to turn the latter’s ferrochrome smelting into a platinum refinery. Zimplats has also been exploring the possibility of refurbishing an old refinery at its Selous Complex, which was initially expected to be open after the first half of 2016 at a cost of about US$130 million.
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