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Amplats' Zimbabwe unit says would take two years to build smelter

20/03/2015 00:00:00
by Reuters
Minister open to platinum levy rethink

ANGLO American Platinum's (Amplats) Zimbabwe unit said on Friday it would take two years to build a new smelter to comply with President Robert Mugabe's demands for firms to process platinum locally.

The government in January introduced a 15 percent export tax on unrefined platinum and Amplats said last month the levy would cost the company about $10 million a year.

Colin Chibafa, chief financial officer at Amplats' Unki Mines, said the company was planning to carry out a study on how much it would require to build a smelter and whether it can be operated profitably.

"Assuming all detailed study work has been completed and all necessary regulatory approvals obtained, it will take approximately two years to construct a new greenfield smelter," Chibafa said in e-mail responses to questions from Reuters.

Unki, the smallest of three operating platinum mines in Zimbabwe, produced 61,300 ounces in 2014, which was four percent down on its 2013 output.

Chibafa said resolving the platinum tax and requirements for foreign-owned mines to sell majority shares to black Zimbabweans would help the company decide on how to ramp-up production.

In 2012 Amplats said it had agreed to transfer 51 percent of its shares in Unki to locals for $143 million, adding that the deal would be funded through dividends over 10 years.

But Chibafa said Unki was still in talks with the government, which is championing the indigenisation programme.

Chibafa said low platinum prices and the 15 percent tax had put Unki into an unsustainable loss-making position.

"Improved market conditions and resolution of matters that affect Unki's viability will all positively impact on its ability to obtain capital to fund any planned expansions," he said.


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