HARARE – Mimosa Mining Company (Mimosa) — jointly owned by Impala Platinum (Implats) and Aquarius Platinum (Aquarius) — plans to shed 100 workers under a voluntary retrenchment exercise as part of cost containment measures.
The Zvishavane-based platinum group metals (PGM) producer, employing around 1 700 people, recorded a decline in revue to $33,5 million in the quarter to September 2013 from previous quarter’s $39,5 million due to depressed commodity prices, among other challenges.
“With the volatility in the prices of platinum group metals and an upward trend in the industry cost base, Mimosa Mining Company has been focusing on optimising its own cost base,” its executive chairperson Winston Chitando said, adding “this has culminated in the need to embark on a voluntary retrenchment exercise for 100 people”.
He said the miner has been engaged on a “labour optimisation” exercise, for the past three years, which involves the “multi-skilling and tasking of various skills and positions”.
Chitando said Mimosa remained committed to growth of its mining activities in Zimbabwe and will engage stakeholders on the details of the retrenchment exercise.
This comes amid reports that the group planned a massive retrenchment, laying off nearly 1 000 of its permanent work force.
It is also on the back of analysts having said cost pressures exerted on the mining industry in the form of wage increases, high transport and electricity costs and depressed metal prices would ultimately impact negatively on employment.
Meanwhile, during the quarter to September 2013, Mimosa’s cash margins decreased from 29 percent to 17 percent in the period due to declining revenues.
Although the platinum miner’s production improved by six percent to 625 656 tonnes, quarter-on-quarter head grade deteriorated slightly to 3,63 grammes per tonne.
Mimosa’s production attributable to Aquarius for the period under review declined from 28 584 ounces (oz) to 27 555 oz.
Overall platinum production stood at 55 110 oz.
Aquarius’s chief executive Jean Nel said while Mimosa’s cost base remained in line with forecasts, “the quarter in question was yet another challenging quarter on all fronts.”
He said the PGMs “business remained marginal at prevailing metal prices, and that there appeared to be no imminent improvement in metal prices”.
Recently, Chitando said Aquarius and Implats were assessing whether to dig a second shaft to expand production at Mimosa mine.
“We are in the process of undertaking a feasibility study,” Chitando said.
“There is work taking place in assessing various options,” he said, declining to give further details.
Mimosa is one of three operating platinum mines in Zimbabwe, which has the second-biggest known reserves of the metal after South Africa.