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Impala, Aquarius Mine in Zimbabwe Mulls Second Shaft

Oct. 28 (Bloomberg) -- Aquarius Platinum Ltd. and Impala Platinum Holdings Ltd. are assessing whether to dig a second shaft to expand production at their Mimosa platinum mine in Zimbabwe, Winston Chitando, chairman of the operation, said.

Aquarius shares plunged in Sydney, Johannesburg and London.

“We are in the process of undertaking a feasibility study,” Chitando said in an Oct. 26 interview at the mine, near Zvishavane, 299 kilometers (186 miles) southwest of Harare, the capital. “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 reserves of the metal after South Africa. Zimbabwe Platinum Mines Ltd., a unit of Johannesburg-based Impala, and Anglo American Platinum Ltd. also run mines in the country. Mimosa produced about 218,000 ounces of platinum group metals in its last financial year.

By law, mining companies operating in Zimbabwe must sell or cede 51 percent of their local assets to black citizens of the country or the government.

“There are discussions which are taking place with government,” Chitando said. “So far we are happy with them.”

Aquarius shares declined 5.1 percent to 6.83 rand as of the close in Johannesburg, their biggest decline since June 19, while falling 6.9 percent in Sydney and as much as 7.8 percent in London. Impala shares fell 0.8 percent to 123.85 rand in Johannesburg while the price of platinum rose 1.1 percent to $1,468.85 an ounce as of 3:41 p.m. in London.

“Any consideration of further investment in Zimbabwe, and a second shaft would be quite a significant one, is not going to be viewed all that positively,” Kieron Hodgson, a London-based analyst at Charles Stanley Securities Ltd., said in an e-mailed response to questions. “Mimosa would bear 100 percent of the cost, but just receive 49 percent of the benefit.”

To contact the reporter on this story: Godfrey Marawanyika in Harare at gmarawanyika@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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