HARARE – Platinum group metals (PGM) producers in Zimbabwe are carrying out a feasibility study on the construction of a $3 billion platinum and base metal refining complex in the country, an industry group said.
The country’s Chamber of Mines said the miners —Impala Platinum Holdings (Impala), Anglo American Platinum Limited (Anglo) and Aquarius Platinum (Aquarius) — are “considering jointly building a smelter, a base metals refinery and a precious metals refinery.”
This comes as government has been calling for value addition in the extractive sector as part of increasing its revenue streams.
Zimbabwe — which has the world’s second-largest known platinum deposits after South Africa and accounts for about six percent of global production — does most of its processing in neighbouring South Africa.
Economic experts say the absence of a local refinery has resulted in the loss of revenue and job opportunities to the country.
They argue that the establishment of a refinery would significantly increase revenue from the mineral since it is found in abundant quantities in the country.
Platinum occurs with a number of other precious metals including palladium and rhodium as well base metals, used in industry, such as nickel.
Impala, through its Zimbabwe Platinum Mines Limited unit, operates the Ngezi mine itself and runs the Mimosa operation in a venture with Aquarius.
Anglo American Platinum, known as Amplats, owns the Unki Mine.
Together the mines are forecast to produce about 365 000 ounces of platinum this year.
“The Platinum Producers Association are still finalising the cost of construction and commissioning of these units,” said the Chamber of Mines.
The industry body noted that additional costs will include power supply, road, water and housing, the group said.
Currently the country cannot supply the more than 100 megawatts of electricity the complex would need.
“The critical requirement to spur growth in our industry is power,” said Chamber of Mines.
It has also been argued that current production levels of less than 500 000 ounces are considered too low to sustain a refinery.
The Chamber of Mines recently noted that Zimbabwe has far bigger platinum reserves than Russia and the capital-intensive mining sector requires $5,3 billion and predictable policies to stimulate platinum output.
The mining grouping said more investment as needed in the platinum mining sector to outpace Russia as the world’s second-biggest producer of the white metal.
“It’s evident from 2017 onward Zimbabwe’s production of platinum will be approaching that of Russia. This growth projection, however, requires significant investment,” said the Chamber.
The chamber said to increase production to the targeted 500 000 ounces per annum requires the setting up of base and precious metal smelters and refineries, investment of $2,8 billion in mines, $2 billion in processing plants and between $200 and $500 million to ensure adequate power supply.
Official figures show that last year Russia produced about 800 000 ounces.
Zimbabwe’s largest platinum producer, Zimplats, has invested over $30 million in carrying out a study for the establishment of the first-ever platinum group of metals refinery in the country. ? With Bloomberg