ANGLO Platinum (Angloplat), Impala Platinum (Implats), and Sibanye-Stillwater have struck an agreement for guaranteed power supplies in Zimbabwe in return for hard currency to settle foreign currency obligations accrued by the southern African country’s state power utility.
Power outages and foreign currency woes are among the major headwinds for platinum and other miners in Zimbabwe. Electricity shortages have been disruptive to productivity for the three platinum miners and they have had to scramble for a solution to get a guaranteed and uninterrupted power supply.
“We have had to push for this deal for a sustainable solution to power outages that have been affecting production, with the risk that production was going to be affected,” said one executive with a platinum mining company.
He added: “We have previously had to pay for all our electricity consumption in foreign currency and that helped a lot but we believe the new arrangement gives the operators some legroom with the limited foreign currency available.”
Angloplat owns the Unki mine while Implats owns Zimplats. Implats also jointly owns Mimosa together with Sibanye-Stillwater. Angloplat has recently unveiled a hydrogen-powered truck at one of its mines in South Africa as miners seek alternative and cleaner energy sources for their operations.
The Chamber of Mines of Zimbabwe chief executive, Isaac Kwesu, told state media yesterday that the Zimbabwean platinum producers had secured “special arrangements with the Zimbabwe Electricity Supply Authority wherein they pre-pay Zesa offshore creditors in lieu of guaranteed and uninterrupted power supply” to the mines.
Zimbabwe, with a power deficit of about 1600MW, procures additional supply from Eskom and Mozambique’s Hydro Cahora Bassa. The state power utility, however, often fails to settle obligations to the regional power suppliers.
The three South African platinum group metals companies with operations in Zimbabwe continue to “adequately fund” foreign currency requirements of their local units. This comes as global commodity prices are inching up amid a rosy outlook owing to supply constraints and complexities from Russia, another top producer, which is currently under international sanctions for its invasion of Ukraine.
The Zimbabwe platinum miners would do well to ramp up production and capitalise on the excess supply and demand opportunities on global markets. However, electricity supply has been one of their major constraints although they have been able to raise output.
Data from the chamber of mines of Zimbabwe shows that platinum production for the first quarter of the current year was 13 percent stronger compared to the previous year. Palladium production for the same period was also higher.
Zimbabwe recently dropped a levy on exports of beneficiated platinum, providing a fiscal respite for the local producers. However, this week, Russian investors quit a large platinum project after selling their stake to a Zimbabwe mining investment firm known as Kuvimba Mining.
Author: Staff Writer