HARARE – Zimbabwe Platinum Mines Limited (Zimplats) says government is reviewing the group’s empowerment plan following the appointment of a new Indigenisation minister.
Government recently appointed Francis Nhema in charge of the Indigenisation and Empowerment ministry, taking over from Savior Kasukuwere.
During Kasukuwere’s time, government had approved Zimplats’s indigenisation proposal, under which the Impala Platinum Limited subsidiary ceded a 51 percent stake to locals in a $971 million deal.
However, the transaction raised eyebrows with market observers pointing out irregularities.
Zimplats said it hoped Nhema would “consider and make necessary adjustments to the plan”.
“Following the installation of a new government, the company’s indigenisation plan will now be reviewed by the new minister of Indigenisation,” the group said in a trading update for the quarter-ended September 2013, adding that discussions will also include further engagement on the previously announced land acquisition by government.”
Government recently announced a compulsory acquisition of Zimplats’ 28 000 hectares of mining ground, which the group has since objected.
Under the indigenisation deal, 31 percent was issued to National Indigenisation and Economic Empowerment Board (Nieeb)’s fund, 10 percent to employees and the other 10 percent was given to Ngezi-Zvimba Community Share Ownership Trust.
Initially, Zimplats insisted on empowerment credits for ground it released to government in 2006 to be included in its indigenisation compliance deal.
According to the Indigenisation Act all foreign-owned firms are required to cede at least 51 percent shareholding to locals.
Meanwhile, Zimplats’ revenue rose 16 percent to $146 million during the period under review from $126 million recorded in the previous quarter, as a result of price adjustments on pipeline sales made at year-end.
The group’s operating profit surged to $39,8 million from $22,5 million, a 77 percent increase.
“Cash costs per 4E ounce were 16 percent higher than the previous quarter, impacted by lower platinum production (in converter matte), and increases in the effective electricity tariff and trackless mining equipment maintenance rates,” said the platinum group metals producer.
It noted that the average power tariff increased by 35 percent from the previous quarter as prepaid power units charged at 2,2 cents per kWh were exhausted in May 2013.
“Trackless equipment maintenance contract rates were reviewed upward midway through the previous quarter, impacting maintenance costs for the quarter,” said the company.
The Ngezi-based miner’s local spending remained unchanged at $42 million.
During the quarter, Zimplats paid $32 million to the government in direct and indirect taxes, seven percent higher than the previous quarter, largely as a result of an increase in withholding tax on foreign services, royalties on metal sales and withholding taxes on technical fees received from the operating subsidiary.