Mine collapse dents Zimplats performance

Published: 07 June 2015

Zimbabwe's largest platinum producer Zimplats reported a depressed performance in the last quarter ending December 2014, with the miner posting a $20,5 million operating loss due to the collapse of its largest mine, Bimha.

The group - 87 percent owned by South Africa's Impala Platinum Holdings - said disruptions caused by the Bimha collapse resulted in lower production volumes.

"Production during the quarter was significantly impacted by the precautionary closure of Bimha Mine (August 23, 2014)," said Zimplats in its quarterly report.

"However, productivity from these teams has been impacted by constrained redundancy. Consequently, tonnes mined decreased by 15 percent from the previous quarter," it said.

Tonnes milled during the quarter under review decreased by 12 percent from the previous quarter due to lower mining volumes, resulting in an 11 percent decrease in 4E metal production in concentrate.

"Consequently, the company reported an operating loss of $20,5 million for the quarter… Revenue decreased by 24 percent from the previous quarter, impacted by an 18 percent decrease in gross revenue received per (4E) ounce and a seven percent decrease in sales volumes," the miner said.

In July last year, Bimha - the largest of Zimplats' four mines - collapsed due to accelerated deterioration of ground conditions associated with a major shear, affecting nearly 50 percent of the mine's current mining footprint.

Direct operating costs decreased by three percent compared to the previous quarter, in line with lower production.

"However, total operating cost for the period under review increased by 21 percent from the previous quarter, directly as a result of the collapse at Bimha Mine and the loss of associated underground infrastructure (development, support, plant and equipment)."

"Consequently, an amount of $22,9 million has been written off during the quarter. An insurance claim is in the process of being finalised for associated plant and equipment, and any compensation received will offset the impact of the write-off," Zimplats said.

In line with lower production and metal prices, revenue-based royalties declined by 25 percent.

Following a risk assessment, the board initiated the re-development of Bimha Mine which commenced in December 2014 with two mining fleets deployed to reestablish reef access.

Zimplats paid $497 million in levies to government between 2002 and the period under review.

Shareholders received dividends of $63 million during the period. Capital expenditure to expand and maintain operations gobbled up $1,2 billion.
- dailynews

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