Zimplats remits US$164m tax contribution

ZIMBABWE'S largest platinum miner, Zimplats, says its tax contribution to the Government increased by 95,2 percent in the financial year ended 30 June 2020 to US$164 million.

In its 2020 integrated annual report, the platinum producer said its operations continue to grow with increased support for local enterprises, which has resulted in more than 2 000 jobs being created in the last seven years.

"Payments to Government in respect of corporate tax, withholding tax, royalties, payroll taxes and customs duties for the year amounted to US$164 million compared to US$84 million in the prior year," said Zimplats.

During the year under review, the company continued with its drive to positively contribute towards the economic development of Zimbabwe. In pursuit of the above objective, the platinum producer indicated that during the financial year, it procured 60 percent of its goods and services worth US$220,7 million from local suppliers. However, the figure was less than US$234 million achieved in 2019.

"The decrease in payments to local suppliers was attributable to the decrease in capital expenditure from US$115 million in FY2019 to US$104,2 million and high imports demand for strategic projects," said Zimplats.

During the period under review 6E metal (platinum, palladium, gold, rhodium, ruthenium and iridium) production was marginally above the 2019 financial year despite a five percent increase in the volume of ore milled. This was due to the expected metal inventory build-up in the furnace at start-up after the rebuild shutdown, which lasted 122 days from June 10, 2019.

"This resulted in a 42 percent increase in gross revenue per 6E oz from US$1 101 achieved in FY2019 to US$1 566 in FY2020. This was partly offset by a three percent decrease in the quantity of 6E ounces sold. Profit before tax increased to US$374,2 million from US$205,3 million achieved in FY2019."

The group generated US$258,4 million from operating activities and closed the year with a cash balance of US$135,8 million after investing US$104,2 million in capital projects during the year.

On the outlook, the platinum producer said it remains committed to extracting and processing its mineral resource in Zimbabwe in a manner that creates value for all stakeholders.

"As a result, the group is progressing with all its major projects, which include the US$264 million Mupani Mine development project and completion of the US$101 million Bimha redevelopment project. Currently, US$99,5 million has been invested in the development of Mupani Mine and US$98,8 million on Bimha Mine redevelopment."

The group continues to scan the environment for investment opportunities in Zimbabwe saying the future of the company remains bright despite the pressures from the operating environment and the threats from Covid-19.

"The board and management remain committed to putting in place systems to mitigate the potential impact of Covid-19 on the company, its employees, contractors and suppliers.

"While this is a big threat by any standard, the measures put in place by management have so far been effective and can deliver positive results going forward. The board and management will continue to monitor development around this pandemic, both locally and internationally and respond appropriately," it said.