Platinum sector on alert as Mugabe threatens ‘absurd’ export freeze

via Platinum sector on alert as Mugabe threatens ‘absurd’ export freeze | SW Radio Africa by Alex Bell  November 12, 2013

Platinum mining firms in Zimbabwe are said to be on alert, following threats by Robert Mugabe that all exports of the metal will be halted.

Mugabe was speaking at a ZANU PF meeting over the weekend, where he accused platinum firms of ignoring a government ‘directive’ two years ago to set up a Zim based refinery.

“Let us close our doors immediately and say no raw platinum will go to South Africa. The former minister gave them two years and we must see them now arranging to build a refinery,” the state-run Herald newspaper quoted Mugabe as saying.

“If they have not started, after that warning, building a refinery then when the time comes for us to demand that all refining has to be done here, they should not blame us.”

While Zimbabwe has the second largest platinum reserves in the world, raw product is exported to South Africa for refining. With South African mining giants Anglo American Platinum and Impala Platinum leading the platinum mining industry in Zimbabwe, such threats to freeze exports could have serious consequences.

According to the Zimbabwe Chamber of Mines, the country produced 350,000 ounces of unrefined platinum in 2012, which is 150,000 ounces less than the total needed to justify the building of a refinery. The Chamber estimates that a refinery will cost more than $2 billion to build.

Economist John Robertson told SW Radio Africa that Mugabe’s threats are “absurd,” saying the building of a refinery was never a commitment, because it depends on the volume of platinum being mined.

“It may well have been that the volumes would have been higher at this stage, but for the demands of the indigenisation policy. When the government came through with the policy three years ago it nearly brought a halt to the Impala Platinum owned Zimplats operations. It also slowed down immensely the operations of Unki Mine owned by Anglo American.These companies became less capable of raising money to fund expansion plans while indigenisation was hanging over their heads,” Robertson explained.

Robertson also said that the threats to freeze the exports was an unrealistic and ‘absurd’ statement, because the money the mining firms receive from sending the platinum to South Africa covered their various costs, including wages.

“Any freeze would immediately put a stop to their revenue and would put an end to thousands of jobs,” Robertson warned.

He added that the threat would further discourage investment in Zimbabwe, while leaving current investors on alert.

“They’d be disturbed that the government is interfering to this extent and is displaying this level of incompetence and ignorance. The main message will go out to (potential investors) that this is not the place to come,” Robertson said.

SW Radio Africa’s correspondent Lionel Saungweme agreed that the threats, if carried out, would further discourage new investment in Zimbabwe. He said the statement not only poses a danger to diplomatic relations, but would also “kill off any optimism since the stolen election, after many promises made by ZANU PF.”

“The message coming through is that no matter what guarantees are given by this government, they are not worth anything. One would speculate that these are senile statements coming from a senile mind,” Saungweme said.

 

COMMENTS

WORDPRESS: 18
  • comment-avatar
    Washumba 8 years ago

    I said it SA is benefiting more than us, they are very happy with our political situation, they prais our dandaheads so they can do whatever they want.

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    John Robertson is absurd, he has no real abilty and just set himself up as a local economist who historically has always been wrong.

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      Rudadiso 8 years ago

      John, it is not enough to simply claim that Robertson is wrong. Give us the facts that counter his arguments.

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        Easy, Sanctions were inmposed on Anglo locally hence the export of Platinum.
        Their accountant/financial director at the time Allan Wishart, a British National, had a travel ban placed on him by UK. Now in Australia, ANGLO locally has few senior executives left – do some research ask questions don’t make ridiculous statements without evidence to back them up.
        What the President is saying that remove sanctions from Anglo so they can expand locally rather than get a small part on the profit giving the rest to South Africa.
        Rudadiso now do you have any knowledge or facts as the journalist and Robertson had none. You need to research the reason for things not just the statement like the irresponsible journalists.
        You cant just say shame Anglo cant make bucks in South Africa any more without the reason it happened in the first place.
        Many readers even believe the rubbish about targeted sanctions that propaganda journalists promoted.
        It was about bringing Zimbabwe to its knees, no large company or Zesa was left out.
        Any so called economist who states its better that way is an idiot and knows nothing about business or commerce and therefore to avoid embarrassment should keep silent.

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          gorongoza 8 years ago

          Travel sanctions by the British on their national who now stays in Australia are regarded as sanctions against Anglo? Doesnt make any sense. Was he sanctioned because he works for Anglo or for other reasons?

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    Northman 8 years ago

    Robertson and Saungweme got it wrong because this a business deal not a political deal. We need to add value on our exports as a country. South Africa shouldn’t benefit at our expense.

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      Rudadiso 8 years ago

      Northman, given the fact that government is the majority shareholder through indigenisation policy that was pushed through by Kasukuwere, what’s stopping them from building the refinery? You cannot just claim to be a majority shareholder – you inject capital into the company you own.

      Mugabe always manages to cut his nose to spite his face. If they stop the exports abruptly as he says, it just means further job losses because it would be pointless to keep producing the platinum. But of course he doesn’t care, just as he hasn’t cared in 33 years.

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    Mugabe doesn’t understand economics, just political power. He thinks he can force a company to build him a platinum smelter, but if the company is going to loose too much money they will not do it. If Mugabe claims to own 51% of those businesses, then he should come up with the $2 Billion to build it. I’m sure the companies would start to cooperate with that sort of support.

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    Zimbabwe may halt exports of raw platinum to South Africa to force mining companies to build a refinery in the country as a two-year deadline has expired, state media quoted President Robert Mugabe as saying.

    The threat, if carried out, could affect the world’s two largest platinum producers, Anglo American Platinum and Impala Platinum, both of which have operations in Zimbabwe.

    The Southern African country has the world’s second-largest known platinum reserves but mining companies send the raw product to neighbouring South Africa for processing.

    Mr Mugabe, who at the age of 89 won re-election in July, told a weekend meeting of his ruling Zanu (PF) party that platinum producers were ignoring a government directive two years ago to set up a refinery in the country.

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    Shebah 8 years ago

    I wonder where this story is coming from when the miners have already formed an association to set up the refinery costing 3 billion dollars. the setting up is expected to take 3 years. So the miners are complying but maybe its the delay or time frames which are at stake.

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    The President is correct on his call , these mining companies had been operating in Zimbabwe for years and years and they have benefited a lot , apart from paying salaries and income taxes what else have they given back to the community . I am worried that people like DL blames the President that he doesn’t understand economics , DL economically in our developing countries , the major cost that we are always paying for is how to process our raw materials , we have got all sort of minerals in our country but we export our raw minerals to other countries which are alreday advanced in the processing industries , economically this is a huge expense to us and thats exactley what the president is trying to avoid .

    Now look at the advantages of building a refinery in our country
    1-this will mean growth in the country in terms of our mining industries.
    2-the refinery construction will create both temporary and permanent jobs .

    Look here , these countries mining in our country , they need us more than we need them .So please we don’t need to go cheaper all the time , we will never have growth in our country if we go that way .

    @Rudadiso , i am very sorry , indeginisation is still being proposed by the government to the operating companies its not yet implemented , it is very incorrect to say the president owns 51% then he must build the refinery , please withdraw your remarks.

    I don’t support ZANU PF as such , but a creative idea bringing growth to our mining industry must be supported .

    South African have benefited a lot from us , for how long must we continue beefing them up , lets be more focusing and support the creative ideas , you hate the president its fine , but support the good ideas from him .

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    @Rudadiso , thank you i can see you support the idea of indigenisation of which it is good , the government is still pushing that to happen , presntly it is not yet fully implemented , the operating companies still need to comply to the proposed indigenisation policy , you are therefore too forward to say the government/president owns 51% share , its not yet implemented , please be with us come back home .

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    The above goes to DL and Rudadiso .

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    damba 8 years ago

    But surely the mining companies are not sincere.if they had been engaged on the issue two years back they should have got into some commitments.
    Its in the long run beneficial for any country to add value to its products before exportibg

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    Mthwakazi 8 years ago

    Zimbabwe does not produce enough Platinum to justify the capital outlay on a refinery of its own. Please educate the prison-degreed Mugabe on this simple fact!!

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    Mthwakazi 8 years ago

    Please also understand that high political risk in any country will always mean that raising capital in the capital markets for any programme or project will always be difficult.

    So the problem is with the government not the miners. Zimbabwe’s investment rating is zero at the present moment. South Africa has just managed to raise a Rand denominated bond on the capital markety – a first for any African country in this global village.

    Zimbabwe is useless!!

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    Mthwakazi 8 years ago

    As a nation, you are all paying a very heavy price for electing an ANCESTOR for a president.

    Alikathini, you still have to cry tears of blood!!

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    Electing an Ancestor to president you got it right. mthwakazi The ancestors idea is OK but what remains is does it suits the situation He has done it saveral.times to say something so that his faithfuls can clap hands only to find out that nothing will come to the good of us like on the land grab the impoowerment.indigenisation and so on