Zimplats reports US$65 million profit

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PLATINUM mining giant Zimplats recorded an operating profit of US$65 million for the quarter ended March 31, 2013, representing a 26 percent increase over the same period last year. Revenue for the period under review was also higher by 32 percent, compared with the prior period, while operating costs were up 36 percent from last year.
“High revenue has been driven by higher sales volumes and improved metal prices,” said the company in a report for the quarter ended March 31, 2013.
Production from mining activities was up 7 percent from prior period while it went up 3 percent from December last year and this was primarily driven by improved equipment availability.
“Mining production for the quarter was 3 percent higher than the previous quarter, driven primarily by an improvement in underground equipment availability, but the head grade was 1 percent below plan due to the milling of lower grade ore from Mupfuti Mine which is still under development, as part of the Ngezi Phase II expansion,” the company said.
Zimplats said the construction and commissioning of the Ngezi Phase II expansion project had progressed as planned during the quarter.
Zimplats has also advised that it has lodged an appeal with the Special Court for Income Tax Appeals against the Commissioner-General’s determination on the levying of a US$1,5 million penalty on the prior years’ tax liabilities.
The company has also lodged a review application with the High Court against the Commissioner- General’s determination on the levying of US$11 million interest on the prior years’ liabilities.
Zimplats argues that its basis for both the appeal and the review application is that the written undertakings issued by Government in 2001, and on which they had placed reliance, constituted special circumstances which warrant the waiver of both penalty and interest.
Last year, the company agreed to pay the Zimbabwe Revenue Authority US$34 million after the two parties had agreed that claims of the capital expenditure for tax purposes for the period 2007-2011 should be recalculated, given that the undertakings made by the Government on the original formula had not been legalised.
But Zimplats has said payment of the prior years’ liabilities has continued in terms of the agreed payment plan.