Mimosa production up, worries over proposed tax charges

via Mimosa production up, worries over proposed tax charges | The Source January 28, 2014

Production at Zimbabwe’s second largest platinum producer, Mimosa Mine crept up by one percent to 629, 101 tonnes in the second quarter to December after it acquired capital equipment, its parent company said on Tuesday.

The mine spent $11.4 million acquiring mobile equipment, drill rigs conveyor belts and down deep development, South Africa’s Aquarius Platinum said.

However, it said further capital inflows and future production is being hampered by the continued regulatory uncertainty in Zimbabwe’s mining sector.

“The continued regulatory uncertainty in Zimbabwe is of particular concern to us as it impacts Mimosa’s ability to plan future production levels and capital allocation efficiently,” said Aquarius chief executive Jean Nel in a statement accompanying the group’s second quarter results.

“Discussions with the Government of Zimbabwe continue and, seeing as we share the Government of Zimbabwe’s vision for a healthy growing Zimbabwean platinum mining sector, we remain hopeful the matters could be agreed in due course.”

The government gave platinum mines, including the local units of South Africa’s Implats and Angloplats, a two-year ultimatum to set up a refinery plant to add value to local minerals or risk losing their licenses.

Zimbabwe also proposed tax disincentives on the export of raw platinum and other minerals in the 2014 budget, which Nel said will impact negatively on production. The ban will become effective next year.

“The implementation of further taxes will have a significant negative impact on the profitability and cash flows of the entire Zimbabwean platinum sector, particularly in the current low price environment,” Nel said.

He said the mine was engaging the government through the Chamber of Mines in an effort to clarify the proposed changes.

The average Rand-Dollar exchange rate weakened during the quarter, falling by 1.3 percent from R9.99 to R10.12 to the U.S. greenback.

Tagged with:
Posted in the latest articles

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>