Unki Hasn’t Recovered from Productivity Loss – Chibafa
The country’s third-largest Platinum Group Metals (PGM) producer, Anglo-American Platinum-owned Unki Mines, has lost almost a quarter of its productivity since COVID-19, according to Unki Finance Director Collin Chibafa.
Speaking at the Chamber of Mines of Zimbabwe Annual Mining Conference held at Elephant Hills Hotel in Victoria Falls last week, Chibafa said when PGMs produced are divided by the number of employees, this loss becomes evident, stating that the company has not yet recovered from the loss in productivity experienced during the COVID-19 pandemic era.
“…and since COVID, we’ve seen losing almost a quarter in terms of productivity if you look at the PGMs that we produce and divide that by the number of employees. So we really haven’t recovered from that loss in productivity,” Chibafa said.
Regarding the state of the PGM sector, the key issues have been the impacts of COVID-19 in 2020, followed by geopolitical issues that led many customers to stock up on PGMs. This caused prices for palladium and rhodium to rise sharply. However, post-2022 and 2023, these prices have reverted. Despite the platinum market being in deficit in 2023, the price did not respond as expected.
According to Chibafa, Unki anticipates that the palladium sector will move into surplus and rhodium into a more balanced state, but significant de-stocking still needs to occur. Increasing penetration of battery electric vehicles, PGM recycling, and the slower-than-expected phase-out of internal combustion engines are influencing the market. Fuel cells and hydrogen technology may improve the PGM sector outlook, but predicting the next phase of the cycle is challenging.
Chibafa also said that Unki Mines is working to reduce operational costs and ensure efficiency improvements. The company has cut jobs from its head office to ensure profitability.
“Our key forecast strategy is to position ourselves to the left of the cost curve, ensuring profitability regardless of price fluctuations. We also aim to find new uses for PGMs to boost demand and positively impact prices.
“From an Anglo-American Platinum perspective, we cut head office costs last year, reducing our head office staff by a quarter. This year, we announced plans to lay off nearly 4,000 employees and 600 contractors, which should help reduce costs and preserve cash,” Chibafa said.