Mwana Africa Plans to Reopen Zimbabwe Smelter to Refine Platinum
Mwana Africa Plc (MWA), a producer of nickel, gold and diamonds, plans to reopen a smelter in northeastern Zimbabwe to refine platinum-group metals in a move that could ease pressure to build a new refinery in the country.
Mwana will aim to raise debt financing to restart the Bindura Nickel Corp. smelter and refinery mothballed in 2008, Chief Executive Officer Kalaa Mpinga said in a phone interview yesterday from Johannesburg. It would take 12 months to modify the facility to handle 100,000 ounces to 200,000 ounces of platinum concentrates a year, he said.
“We will finance this completely through debt,” Mpinga said. “Our focus is on creating more value and we think the best way is to restart the smelter.”
Zimbabwe is putting pressure on the local units of the world’s biggest platinum producers, Anglo American Platinum Ltd. (AMS) and Impala Platinum Holdings Ltd. (IMP), to bid for the rights to build refineries. The government plans to ban raw exports of platinum by the end of the year in a bid to stimulate growth in the southern African country, which has the world’s largest reserves of the metal after South Africa.
Mwana resumed concentrate shipments from its Trojan nickel mine last April to meet a 7,000 tons-per-year offtake contract with Glencore Xstrata Plc. (GLEN) While the company doesn’t produce enough nickel concentrates to justify restarting the smelter, securing a contract for processing platinum would make it viable, said Mpinga.
“If we get an offtake we can raise the funds for smelter modification,” he said. “We have an asset, infrastructure which could be used to process some of the concentrates being exported to South Africa.”
Zimbabwe produces 430,000 ounces of platinum a year and the industry needs as much as $5.3 billion to boost that to more than 500,000 ounces and construct refineries for processing output, according to producers.
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