Business / Companies
Platinum producers told to start refining locally as govt plans to ban raw exports
13 Feb 2013 at 05:31hrs | Views
THE government told platinum producers on Tuesday to start refining the metal locally within two years, placing a further requirement on an industry already forced to surrender majority shares to locals.
Producers would probably struggle to meet the new goal as refineries are very costly and can take several years to build, especially as Zimbabwe is suffering from a skills shortage.
Mines Minister Obert Mpofu told reporters Zimbabwe wanted to derive more benefit from the resource by having a refinery in the country rather than having metal refined in South Africa.
"For some time the country has not realised significant value from the platinum sector beyond the traditional statutory payments," Mpofu said.
"Consequently, the ministry has decided that beyond two years, it will stop processing exports for semi-processed platinum products.
"This is expected to give way for companies to begin channelling resources towards value addition through establishing a PGM (platinum group metals) refinery in the country."
Zimbabwe has the world's second-largest known platinum reserves behind neighbouring South Africa, which sits on about 80 percent of the white metal used for make emissions-capping catalytic converters in automobiles.
Zimbabwe has long pressed the platinum industry to build a refinery. The sector has said it has long-term plans to so but the current output of below 300,000 ounces annually does not justify the expense, estimated at $2 billion.
The world's top two producers, Anglo American Platinum and Impala Platinum, both have operations in Zimbabwe.
Both Amplats and Impala recently signed off 51 percent stakes in their Zimbabwean operations to local black investors under a controversial empowerment law championed by long-ruling President Robert Mugabe.
Mpofu also announced the government would reclaim some ground from mining companies, to be given to new investors in the sector.
He said this move was meant to curb the holding of mining rights for speculative purposes and would start with the repossession of nearly 28,000 hectares of land from Implats' subsidiary Zimplats.
"Following protracted discussions on the release of excess ground, my ministry is taking a step forward to repossess excess ground from Zimplats, measuring 27,948 hectares," Mpofu said.
The announcement fueled global supply concerns resuling in platinum prices advancing, ending a three-session drop.
One ounce of platinum bought as many as 1.0408 ounces of gold in London Tuesday, approaching the 17-month high of 1.0418 reached on February. 7.
On the New York Mercantile Exchange, platinum futures for delivery in April rose 1.2 percent to $1,717.20 an ounce.
Mpofu warned that the government would continue to take bank idle mining land.
"Let me assure you that the ministry will exercise its prerogative to ensure that all idle ground is repossessed and re-allocated to other investors," he said.
"This exercise is definitely going to spread to all other sectors in the mining industry to encourage expected high levels of mineral productivity."
Producers would probably struggle to meet the new goal as refineries are very costly and can take several years to build, especially as Zimbabwe is suffering from a skills shortage.
Mines Minister Obert Mpofu told reporters Zimbabwe wanted to derive more benefit from the resource by having a refinery in the country rather than having metal refined in South Africa.
"For some time the country has not realised significant value from the platinum sector beyond the traditional statutory payments," Mpofu said.
"Consequently, the ministry has decided that beyond two years, it will stop processing exports for semi-processed platinum products.
"This is expected to give way for companies to begin channelling resources towards value addition through establishing a PGM (platinum group metals) refinery in the country."
Zimbabwe has the world's second-largest known platinum reserves behind neighbouring South Africa, which sits on about 80 percent of the white metal used for make emissions-capping catalytic converters in automobiles.
Zimbabwe has long pressed the platinum industry to build a refinery. The sector has said it has long-term plans to so but the current output of below 300,000 ounces annually does not justify the expense, estimated at $2 billion.
The world's top two producers, Anglo American Platinum and Impala Platinum, both have operations in Zimbabwe.
Both Amplats and Impala recently signed off 51 percent stakes in their Zimbabwean operations to local black investors under a controversial empowerment law championed by long-ruling President Robert Mugabe.
Mpofu also announced the government would reclaim some ground from mining companies, to be given to new investors in the sector.
He said this move was meant to curb the holding of mining rights for speculative purposes and would start with the repossession of nearly 28,000 hectares of land from Implats' subsidiary Zimplats.
"Following protracted discussions on the release of excess ground, my ministry is taking a step forward to repossess excess ground from Zimplats, measuring 27,948 hectares," Mpofu said.
The announcement fueled global supply concerns resuling in platinum prices advancing, ending a three-session drop.
One ounce of platinum bought as many as 1.0408 ounces of gold in London Tuesday, approaching the 17-month high of 1.0418 reached on February. 7.
On the New York Mercantile Exchange, platinum futures for delivery in April rose 1.2 percent to $1,717.20 an ounce.
Mpofu warned that the government would continue to take bank idle mining land.
"Let me assure you that the ministry will exercise its prerogative to ensure that all idle ground is repossessed and re-allocated to other investors," he said.
"This exercise is definitely going to spread to all other sectors in the mining industry to encourage expected high levels of mineral productivity."
Source - Reuters
