Platinum rakes in US$3 billion

via Platinum rakes in US$3 billion | The Sunday Mail 3/4/2016 by kuda bwititi

At least US$2,7 billion has been generated by the country in platinum sales over the past three years with 83 percent of the proceeds remaining in the local economy.

Local platinum miners say at least US$2,2 has been retained by Zimbabwe through various obligations to Government, suppliers and employees.

The figures indicate that the platinum sector is among the top three biggest foreign currency earners alongside tobacco and gold.

While the Ministry of Mines and Mining Development last week could not confirm the platinum sales figures, players in the sector maintained that the country had realised the amount.

There have been concerns over leakages in the mining sector in the wake of revelations by President Mugabe that Government just raked in about US$2 billion of the expected US$15 billion from the diamond sector in the last six years.

Fears were that mining companies were depriving Government of potential revenue by refining Platinum Group of Metals (PGMs) in South Africa and failing to declare other minerals realised from the refining process.

This led Government to issue a ban on raw platinum exports and order platinum producers to set a base metal refinery locally by December 2016.

ZimPlats, Mimosa Mine and Unki operate along the Great Dyke, which holds vast untapped platinum reserves that make Zimbabwe the second largest holder of known platinum reserves after South Africa.
Another company, Great Dyke Investments, which is a joint venture with Russian investors, has commenced operations with planned investment of more than US$3 billion over the coming years.
According to a schedule released by Zimbabwe Platinum Producers president Mr Winston Chirando; US$2,713 360 billion was generated between 2012 and 2015.

“The PGM producers share a vision of growing platinum production and sharing benefits with all stakeholders. Distribution of value-PGM producers payments to local suppliers, employees community and Government of US$2, 2 billion from export proceeds of US$2,7 billion,” he said.

Mr Chitando, who is also Mimosa executive chairman, said payments made to local producers in the period under review were pegged at US$ 893 million which is 29 percent of the total revenue against US$509 million paid to foreign suppliers.

Duties, taxes and royalties paid to Government stood at US$400 million for the three year period.
In the report, Mr Chitando state that capital expenditure for the companies stood at US$ 503 million, while workers were paid US$425 million.

Loan repayments stood at US$206 million, dividends to shareholders were US$ 86 million with interest paid at US$ 34 million.

Corporate social responsibility and community trusts were paid US$ 27 million.

Mr Chitando challenged Government to validate the figures if they have any doubts.
“I challenge anyone, whether it is Government or any individual, to verify the figures for themselves if they have any doubts,” he said.

Asked to respond to the platinum producers’ claims, Mines and Mining Development Deputy Minister Fred Moyo said, “There is asymmetry of information because the producers quantified this information on their own.

“Next time, we need to collate such data together with Government and other stakeholders such as the Chamber of Mines being involved.”

According to the KPMG report mining sector review released in October 2015, “platinum and gold are the largest contributors to revenues in the mining sector”. The report also states that mining accounts for approximately 52 percent of the country’s export earnings. Since 2009, export earnings have accounted for, on average, 61 percent of the country’s liquidity.

KPMG’s report notes that Zimbabwe can perform better in the platinum sector as dependency on raw mineral exports makes it vulnerable to depressed commodity prices, thereby inhibiting its potential to grow.

Global commodity prices have been on a downward trend since their peak in February 2011 due to weakening metal and energy prices and sluggish economic recovery in advanced economies and subdued economic activity in both emerging and developing economies.