Zimbabwe to Reach Record Platinum Output, Johnson Matthey Says

Zimbabwe’s platinum producers are on course to reach record output even as requirements to sell majority stakes to black citizens may inhibit investments in future expansion, a U.K. refiner of the precious metal said.

Producers including units of Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Aquarius Platinum Ltd. (AQP) will probably produce 400,000 ounces of the precious metal in 2013, 18 percent more than a year earlier, Johnson Matthey Plc (JMAT) said today in a report. The country’s output of palladium is expected to increase 17 percent to 310,000 ounces, while rhodium output may rise 14 percent to 33,000 ounces.

“You’ve certainly got some expansion still kicking in,” Peter Duncan, general manager for market research at Johnson Matthey, said at a presentation in Johannesburg. Once existing projects have reached full ramp-up, “it’s going to take another big chunk of capital investment.”

Zimbabwe, the world’s third-biggest platinum producer, said in April it will compel companies to hand over controlling stakes to the state and local citizens. President Robert Mugabe pledged to press ahead with the indigenization policy after winning an election in July.

“I wouldn’t like to bet whether people will have the confidence to” invest in expanding platinum production, Duncan said. “Certainly it has the potential to grow.”

The increase in platinum-group-metals output was largely due to the ramp-up at an expansion project of Impala unit Zimplats Holdings Ltd. (ZIM), the report said. The project will add 90,000 ounces of platinum production capacity, taking Zimplats’ annual total to 270,000 ounces by 2015, according to the report.

Zimbabwe is the world third-largest platinum producer, after South Africa and Russia, it said.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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