Business / Companies
Zimplats warn of operational uncertainties in Zimbabwe
12 Feb 2012 at 17:08hrs | Views
Zimplats, Zimbabwe's biggest platinum miner, has warned shareholders about operational uncertainties in the country.
Analysts also expect investment to be hit by revelations about a Zimplats court dispute with the state over backdated royalties.
Zimplats said the Reserve Bank of Zimbabwe had not returned $34-million it owed the company. Last August outgoing CEO David Brown said the state had given "no indication" when or if the money would be repaid.
Zimplats's recent run-in with the Zimbabwe Revenue Authority involves more than $28.3-million bill in backdated royalties.
"Royalties for the period dating back to January 2010 have been accrued for at a higher rate than that provided for in the company's agreement," the company said.
This was the "subject of a legal dispute between the company and the tax authorities now before the courts".
Analysts expect "lengthy" litigation as the high court has dismissed a Zimplats plea for an urgent hearing.
Last month, Zimplats bankers were ordered to pay $28.3-million from its funds for outstanding royalty payments. Zimra said Zimplats continued paying royalties in 2010 at a rate of 2.5% when this had been increased to 5%.
Zimplats urged shareholders to exercise caution because of these factors, uncertainty over the indigenisation law and looming elections.
Aquarius CEO Stuart Murray, whose company owns the Mimosa Platinum mine jointly with Impala Platinum, said on Thursday regulatory risks of mining in Zimbabwe had risen markedly.
Zimplats blamed factors like the royalties bill and September's 61% hike in power tariffs for its operating costs rising 8% in the quarter.
The December quarter's operating profit was 68% down on the September quarter's as revenue fell 27% to $97-million, partly due to "weakening" international metals prices.
But Zimplats contributed $22-million in direct and indirect taxes, a 38% jump on the previous quarter.
The Ngezi Phase 2 expansion programme was "progressing well and according to plan".
Mimosa's output rose 3% to 104254 ounces and revenue rose 1% to $146-million "due to higher metal prices achieved".
Mining cash costs rose 22% to $67 a ton and costs an ounce 18% to $736.
Analysts also expect investment to be hit by revelations about a Zimplats court dispute with the state over backdated royalties.
Zimplats said the Reserve Bank of Zimbabwe had not returned $34-million it owed the company. Last August outgoing CEO David Brown said the state had given "no indication" when or if the money would be repaid.
Zimplats's recent run-in with the Zimbabwe Revenue Authority involves more than $28.3-million bill in backdated royalties.
"Royalties for the period dating back to January 2010 have been accrued for at a higher rate than that provided for in the company's agreement," the company said.
This was the "subject of a legal dispute between the company and the tax authorities now before the courts".
Analysts expect "lengthy" litigation as the high court has dismissed a Zimplats plea for an urgent hearing.
Last month, Zimplats bankers were ordered to pay $28.3-million from its funds for outstanding royalty payments. Zimra said Zimplats continued paying royalties in 2010 at a rate of 2.5% when this had been increased to 5%.
Aquarius CEO Stuart Murray, whose company owns the Mimosa Platinum mine jointly with Impala Platinum, said on Thursday regulatory risks of mining in Zimbabwe had risen markedly.
Zimplats blamed factors like the royalties bill and September's 61% hike in power tariffs for its operating costs rising 8% in the quarter.
The December quarter's operating profit was 68% down on the September quarter's as revenue fell 27% to $97-million, partly due to "weakening" international metals prices.
But Zimplats contributed $22-million in direct and indirect taxes, a 38% jump on the previous quarter.
The Ngezi Phase 2 expansion programme was "progressing well and according to plan".
Mimosa's output rose 3% to 104254 ounces and revenue rose 1% to $146-million "due to higher metal prices achieved".
Mining cash costs rose 22% to $67 a ton and costs an ounce 18% to $736.
Source - www.businesslive.co.za
