Impala Platinum’s Zimbabwe Unit on Track With $460 Million Plant

Zimplats Holdings Ltd., Zimbabwe’s biggest producer of platinum, will complete the expansion of a recovery plant on schedule in April, processing ore from a new 2 million metric ton underground mine, Chief Executive Officer Alex Mhembere said.

The $460 million project will increase annual production to 270,000 ounces from 187,000 ounces last year. “The second stage, which is underground mining development, will reach full production in 2015 as originally planned,” Mhembere said in an e-mailed response to questions.

Zimbabwe, which has the biggest platinum and chrome reserves after South Africa, doesn’t have a refinery and most of Zimplats’s platinum is processed at Impala Platinum Ltd.’s plant near Johannesburg. Impala, which owned 87 percent of Zimplats, on Jan. 11 signed the terms to sell 51 percent to the country’s black citizens.

Zimplats has spent $30 million on a feasibility study for a refinery in Zimbabwe that will cost at least $2 billion, Mhembere said. “Building a refinery is not only down to cost and the availability of feedstock but also depends on the availability of a number of factors, chief amongst them a stable and adequate power supply,” he said.

Zesa Ltd., the southern African country’s only power utility, produces 1,100 megawatts, while demand is estimated at 2,100 megawatts. The deficit has led to outages that can last as long as 13 hours a day, curbing output, according to the Confederation of Zimbabwe Industries.

Zimplats “isn’t expecting any major shifts” in platinum prices “from current levels in the short term. The medium to longer-term price levels will more than likely respond to supply factors,” Mhembere said.

The metal was 0.3 percent higher at $1.641 an ounce at 9:54 a.m. in London. It gained 9.7 percent in 2012.

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