ENRC, China Move Toward Platinum Production in Zimbabwe
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Zimbabwe Mining Development Corp., a state-owned company, plans to start metal production with Eurasian Natural Resources Corp. (ENRC) and a Chinese company on concessions taken from Anglo American Platinum Ltd. (AMS) and Impala Platinum Holdings Ltd. (IMP)
A venture with ENRC, controlled by businessmen from Kazakhstan and the government of the former Soviet Union country, is due to start producing platinum in the first quarter of next year. An exploration report from an alliance with the Chinese company, previously identified as Norinco International Cooperation Ltd. (000065), is due by year-end.
“Everything is on course” for the venture with ENRC, , to start production in the African country by April, Jerry Ndlovu, managing director of the state-owned Zimbabwean company, said in an interview in Harare, the capital, yesterday. ENRC declined to comment when called yesterday.
Zimbabwe, which has the world’s biggest resources of platinum after South Africa, is trying to expand its mining industry to help the country recover from a decade of economic contraction between 2000 and 2009. Failed land reform programs slashed production of tobacco and roses, increasing the country’s reliance on metal.
The country will produce about 365,000 ounces of platinum as well as metals found in the ore alongside the metal this year from mines owned by Anglo American Platinum, Impala and Aquarius Platinum Ltd. (AQP), according to the country’s’ Chamber of Mines, an industry body. Those companies, the rest of whose assets are in South Africa, are the only producers of the metal in Zimbabwe.
Mining companies operating in Zimbabwe are compelled by law to cede or sell control of their assets to the government or black local citizens.
ENRC holds 60 percent of Todal Mining Ltd., which owns a 4,500-hectare (11,120-acre) concession near Shurugwi, 233 kilometers (145 miles) south west of Harare, according to its last annual report. ZMDC owns the rest.
ENRC acquired the interest when it took over Central African Mining & Exploration Co., known as Camec. Camec paid $120 million in cash and shares to Zimbabwe for the stake in 2008 and agreed to lend the government of President Robert Mugabe a further $100 million, it said in a statement at the time. The concessions were formerly held by Johannesburg-based Anglo American Platinum.
In 2008 Camec said a mine on the Bougai and Kironde concessions would be built at a cost of $200 million within 18 months and would produce as much as 150,000 ounces of platinum annually.
ZMDC also has an equally owned venture, Global Platinum, with a Chinese company, Ndlovu said, declining to give the identity of the company. The venture will operate as Shin-Zim Ltd., he said. In 2006 the ZMDC said it formed Global Platinum with Norinco, a state-owned Chinese engineering company, on concessions taken from Impala.
“We have spent $40 million on exploration for that project,” he said. “The final report for exploration shall be with us before the end of the year.”
Global’s concessions are in Selous, 69 kilometers (43 miles) south west of Harare.
“We are still at the exploration stage,” Richman Ncube, a spokesman for Global, said in an interview. Results are “favorable, these things take time.
The chamber listed other potential producers as RusChrome, Amari Platinum and ACR, in a report this month.
In August Russia’s Kommersant newspaper reported that Vi Holding, Rostech and Vnesheconombank, a state-owned development bank, were considering buying 40 percent of RusChrome Mining for $300 million to gain access to the Zimbabwean deposit. Kommersant cited two unidentified people close to the talks.
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