The country’s largest Platinum Group Metal (PGM) producer, Zimplats, has used US$1.3 billion of its US$1.8 billion budgeted expansion program launched in 2020 and now focuses on reducing operating costs while improving production.
by Rudairo Mapuranga
PGM metal prices have declined significantly, in some cases by more than 50%, threatening the financial viability and sustainability of business operations for most PGM producers.
Speaking at the Chamber of Mines Annual General Meeting and Conference held at Elephant Hills Hotel in Victoria Falls last week, company CEO Alex Mhembere said Zimplats has shielded its US$1.8 billion expansion plan in response to the sharp decline in PGM pricing. Zimplats is implementing stringent cost-preservation measures to protect the business from the enormous pressure on profitability and cash flow and preserve, as much as possible, the jobs of more than 8,000 people employed by the company (both permanent and contract).
Under its US$1.8 billion capital expenditure investment, Zimplats’ strategy involves setting up integrated projects, including the development of new mines, expansion of the smelter, construction of an additional concentrator, a base metal refinery, a sulphuric acid plant, and the establishment of a 110-megawatt solar power plant.
Mhembere also said that his company was implementing high-technology mining to improve operational efficiency.
“We have been implementing a number of measures, including labour rationalization. We considered the issue of transference and offered our employees the opportunity to engage in volunteer activities, but there was very little uptake. Consequently, we implemented a different model. Out of our 8,000 employees, only 61 participated, and we have been able to retain them. We believe this is a strategic advantage, as it allows us to maintain our labor strength and be ready when the market recovers.
“Our focus is on improving productivity. We aim to be on the left side of the cost curve, which enables us to continue our work efficiently. This has been our strategic position and remains so. We are rationalizing our cash expenditure. The major growth project announced in November 2020, worth $1.8 billion, has been implemented. We have spent $1.3 billion of that amount and will rationalize the remaining $500 million over the next two to three years by delaying some projects. However, we have completed most of the projects, enhancing our capacity to manage efficiencies better.
“We are also implementing high technology in mining. For depleted mines, we are now using pillar reclamation and remote mining methods. Additionally, we are introducing high-tech mining in our new developments to reduce costs. We have fibre optics underground and our own license to run the technology. Our mining operations are visible from here and from everywhere, which helps improve productivity,” stated Mhembere.