New $264m Zimbabwe platinum mine to last 34 years

A new platinum mine in Zimbabwe will triple the reserves of Zimplats (ASX:ZIM), the country’s largest platinum miner, and allow the company to replace production from the Rukodzi and Ngwarati mines once they become depleted.

Zimplats Holdings Limited and its parent company, Impala Platinum Holdings Limited (Implats) (JSX:IMP) announced on November 30 that the Mupani mine would go ahead following the completion of a bankable feasibility study.

Completing the $264-million mine will boost the platinum reserves of Zimplats from 3 million to 9 million ounces. Developing the main underground access infrastructure, at 1,105 metres deep, is expected to take 37 months, allowing first mining to take place in early 2021.

At full production of 2.2 million tonnes per annum, expected in 2025, the room and pillar mine is expected to employ 1,000 people; it has an anticipated life of 34 years.

Eighty-seven percent owned by Implats, Zimplats currently operates four underground mines and a concentrator at Ngezi.

Platinum miners in Zimbabwe have been pressured by the government of President Robert Mugabe to process more metal locally, as the African country tries to get more value from its minerals.

In 2015 Zimbabwe suspended a 15% tax on raw platinum exports, ceding to companies’ request to have at least two more years to set up smelters and refineries.

While Zimbabwe holds the world’s second-largest platinum reserves after South Africa, analysts believe the volumes mined there are not high enough to make construction of multibillion-dollar refineries economically viable.

They are also skeptical that the infrastructure and the energy supply would be adequate to run such plants and point out that there is excess refining capacity in South Africa.