Zimbabwe’s deadline for the world’s biggest platinum producers to submit plans to build a refinery expires today as it confirms its decision to ban raw exports of the metal by year end, according to a government document.
Secretary for Mines and Mining Development Francis Gudyanga “extended an invitation” to companies including the local units of Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd. to bid for the rights to build platinum and base-metal refineries. The country’s producers would be compelled to send their ore to the plants, according to a Jan. 3 letter to producers, a copy of which was obtained by Bloomberg News.
As there has been no progress toward building a refinery, “the government is reiterating its resolve to enforce the two-year period window, which ends in 2014, after which exports of raw platinum concentrates will not be permitted,” Gudyanga said in the letter.
The Platinum Producers Association, which represents the biggest producers, didn’t immediately respond to e-mailed questions.
Zimbabwe, which has the biggest platinum reserves after neighboring South Africa, produces 430,000 ounces of the metal 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.
Platinum rose 1 percent to $1,447.50 an ounce at 1:28 p.m. in London.
Zimbabwe is trying to boost the value of exports as it seeks to kickstart the recovery of its economy, which contracted by 40 percent between 2000 and 2008 as political disputes repelled investment and pushed the inflation rate to the highest in the world.
Deputy Mines Minister Fred Moyo on Jan. 9 said setting up a refinery, which would cost as much as $2 billion, before next year is probably unachievable.
In the letter, the government asked the bidding companies to detail their electricity, water and infrastructure requirements. The companies say Zimbabwe doesn’t have available the 100 megawatts of power the refinery would need.
The other companies the letter mentions are Aquarius Platinum Ltd., RusChrome, a Russian-owned venture, Global Platinum Resources, part-owned by China’s Norinco, Todal, which is part-owned by Eurasian Natural Resources Corp. and a unit of Mwana Africa Plc. Companies known as Karo Resources and Partnership Platinum Consortium are also included in the letter.