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Zimbabwe Needs Raw Material to Avoid ‘White-Elephant’ Refineries

Zimbabwe needs to ensure consistent supplies of raw materials so that plants built to process them locally don’t become “white elephants,” the head of the southern African nation’s Chamber of Mines said.

“There must be output to keep beneficiation facilities running all the time, otherwise we are creating white elephants,” Alex Mhembere, who is also the chief executive officer of Impala Platinum Holdings Ltd. (IMP) unit Zimplats, said at the Investing in African Mining Indaba in Cape Town yesterday.

Zimbabwe wants the world’s biggest platinum producers to build a refinery to help boost the value of its exports and kick start the recovery of its economy, which contracted by 40 percent between 2000 and 2008. Units of companies including Impala and Anglo American Platinum Ltd. (AMS), the largest producer, would be compelled to send their ore to the plants, according to a Jan. 3 letter to producers.

The country’s output of the metal is 430,000 ounces a year, the document shows. The country’s platinum industry needs as much as $5.3 billion if it is to expand to more than 500,000 ounces of output and to construct refineries to process platinum group metals and industrial metals extracted from the same ore bodies, according to the platinum producers group.

Achieving the necessary output for a platinum refinery is possible, Mhembere said.

Zimbabwe will do what is necessary to ensure the refinery, which will require about 200 megawatts of electricity capacity, will go ahead, Mines Minister Walter Chidakwa said at the Cape Town briefing. Coal-bed methane is an option, he said.

“We can do the same thing for gold, with silver, with platinum, palladium and all the other PGM metals,” he said.

China Africa Sunlight Energy Ltd. in September said it plans to invest as much as $2.1 billion developing coal mines and building a 2,100-megawatt plant powered by the fuel in Zimbabwe to help ease electricity shortages. The company has spent $20 million on exploration, and was granted rights to look for coal and coal-bed methane in the area in October 2012.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at

To contact the editor responsible for this story: John Viljoen at

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