The country’s biggest Platinum Group Metal (PGM) producer, Zimplats, has reported a staggering 96% decline in profits for the fiscal year ending September 30, 2024, Mining Zimbabwe can confirm.
By Rudairo Mapuranga
The company’s profit after tax plummeted to just US$8.2 million, a significant drop from the US$205.5 million recorded in FY2023. This sharp decline has also negatively impacted Zimplats’ contributions to the Zimbabwean national fiscus, which have fallen by more than a third over the past two years.
According to Zimplats’ FY2024 annual report, the company’s contribution to the national tax base has been steadily declining since peaking in FY2021. Zimplats contributed approximately US$100 million in taxes in FY2024, down from US$150 million in FY2023 and significantly below the US$270 million in FY2022 and US$420 million in FY2021.
Zimplats Chairman, Professor Fholisani Sydney Mufamadi, emphasized the company’s commitment to maintaining strong relations with Zimbabwe’s tax authorities and meeting all tax obligations despite the challenging economic environment. However, he acknowledged that the company’s fiscal contributions have decreased due to weakened profitability and increased capital investments.
“The decline in fiscal contributions in FY2024 is mainly attributable to the negative impact of depressed metal prices on the company’s profitability, coupled with increased capital investment. Our operating subsidiary, Zimbabwe Platinum Mines (Private) Limited, continued to make a significant contribution to the national fiscus, as reflected in our tax payments, although these have declined with profitability,” Professor Mufamadi said.
Prof. Mufamadi noted that the company faced a difficult year as global PGM prices remained subdued, heavily affecting revenue generation. He also highlighted a 25% decline in gross revenue per 6E ounce, which fell from US$1,595 in FY2023 to US$1,196 in FY2024. Overall turnover dropped by 20%, falling to US$767.1 million from US$962.3 million in the previous year.
With the company’s US$1.8 billion, 10-year expansion program underway, Zimplats increased its capital investment by 44% to US$439.5 million in FY2024, up from US$304.3 million in FY2023. This expansion program is supported by a Memorandum of Understanding (MoU) signed with the Government of Zimbabwe in October 2021, as part of Zimplats’ long-term growth strategy. However, the significant capital expenditure, coupled with lower metal prices, has further strained the company’s financial performance.
Zimplats’ cost-saving measures, including rationalizing labour costs and power imports, helped mitigate some of the financial impacts. The company reported that cash generated from operating activities decreased by 54% to US$286.8 million, down from US$461.9 million in FY2023.
Despite the challenging circumstances, Zimplats remains committed to its expansion program and its obligations to Zimbabwe’s tax authorities. The company continues to monitor the global PGM market closely and is focused on controlling internal costs to preserve value.
“Management continues to focus on controllable factors to preserve the value of the company while progressing with the expansion program, which is critical for the long-term success of Zimplats,”
Professor Mufamadi said.
Zimplats’ FY2024 financial performance underscores the challenges faced by the PGM industry, as global metal prices remain volatile and unpredictable. The company’s fortunes—and, by extension, its contributions to the Zimbabwean economy—remain heavily dependent on a recovery in PGM prices.
