Zimplats’ US1,8bn investment strategy remains on course
Platinum group-metals (PGMs) giant, Zimplats, says the implementation of its major projects under the US$1,8 billion investment strategy is progressing according to plan as it seeks to boost production and beneficiation capacity.
Zimplats, as part of their overall capital investment strategy last year approved a budget of US$1,8 billion to be implemented over a 10-year-period.
In a trading update for the quarter ended March 31, 2022, Zimplats said the implementation of the Mupani Mine development project, the upgrade of Bimha Mine and the construction of the Third Concentrator Plant progressed according to plan during the quarter.
“Cumulative project expenditure of US$241 million was incurred and commitments of US$130 million at period end, compared to a combined budget of US$562 million,” it said.
According to the group, the Mupani Mine development and Bimha Mine upgrade are replacement mines for Rukodzi, Ngwarati, and Mupfuti mines that will be depleted in FY2022, FY2025 and FY2028, respectively.
Zimplats said commissioning of the Third Concentrator Plant will increase milling capacity by 0.9 million tonnes per year, equivalent to circa 80 000 6E ounces and is expected to be commissioned in August 2023.
The company said the US$521 million smelter expansion and SO2 abatement plant projects have commenced and commitments for major contracts were made during the quarter.
“The project includes the construction of a 38MW furnace and establishment of an acid plant for the abatement of sulphur dioxide generated by the smelter operations.”
Zimplats noted that the US$37 million Phase 1 implementation of the 185MW solar project received board approval during the quarter.
It said the 35MW Phase 1 plant at Selous Metallurgical Complex is scheduled for completion in FY2024.
“In total, the project has four implementation phases with the final phase scheduled for completion in FY2027 at an estimated total project cost of US$201 million,” said the company.
During the quarter under review, the Group’s mined volumes improved by two percent quarter-on-quarter and were two percent weaker year-on-year mainly due to lower trackless mining equipment availability at Mupfuti Mine during the current quarter that has since been addressed.
The company said the new trackless equipment maintenance service provider has now scaled up operations to optimum level. 6E head grade improved marginally to 3.40g/t from 3.39g/t while milled tonnes decreased marginally to 1,71 million tonnes due to fewer operating days than in the prior quarter.
“Milled volumes were, however, stable year-on-year.” 6E metal in the final product increased by 6 percent to 148 541 ounces from the prior quarter and increased by 8 percent year-on-year.
Zimplats said production benefitted from a positive smelter inventory movement and the treatment of concentrates stockpiled during the furnace shutdown in the prior quarter.
The group’s total operating cash costs for the period increased by three percent from the prior quarter, impacted by inflation on major production inputs.
The company noted that a total of US$4.3 million was transferred from opening stocks to operating costs during the period as a result of the smelting of concentrates stockpiled during the routine furnace taphole inspection shutdown in the prior quarter.
“This resulted in the cost of metal produced rising by 8 percent compared to the prior quarter,” said the company.
The group noted that volume gains partly offset inflationary pressures and resulted in a two percent increase in unit cost from US$735/oz to US$752/oz.
Year-on-year unit cost increase of 6 percent reflected the mitigating benefit of higher production volumes on the 15 percent cost increase.
The group highlighted that a total of US$0.9 million was spent on exploration projects, with a further US$1.8 million committed as at 31 March 2022.
The exploration activities included mineral resource evaluation, comprising approximately 5 740 metres of surface diamond drilling over existing projects on the two mining leases.
“Exploration activities increased geological and geotechnical confidence in production schedules,” the group said.
Zimplats said it achieved two million fatality free shifts during the quarter. However, two lost-time injuries, including a fatality one, were reported in the period under review.