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Power shortages hamper setting up of platinum refinery, says Mimosa

by Dosman Mangisi
15 May 2013 at 03:04hrs | Views
Power shortages and a huge initial capital outlay of $2 billion are the major stumbling blocks to the setting up of a platinum refinery in the country, Mimosa Platinum Mines executive director Mr Herbert Mashanyare has said. In a presentation during a meeting to discuss the proposed mines and minerals policy in Gweru recently, he said it was not that platinum companies were reluctant to invest in a refinery but were constrained by power deficits in the country and the money needed to get the project running.

Mr Mashanyare said two refineries needed to be installed - one for base metals which separated nickel, copper and cobalt and a precious metals furnace which separated nine different metals including platinum, palladium, gold and rhodium.

"As platinum producers, we are not at all reluctant to set up metal refineries. What is holding us back are the power shortages in our country. You cannot run a smelter without enough power. To our knowledge, we don't have any power project with a reached financial closure where everything is there in terms of capital. And there is no firm date from the Government on when power will be linked to the grids from the two major sources. The other significant hurdle is the cost. There is no way it will cost below $2 billion, limiting our ability to put up one in a short space of time.

"There are also a lot other things to consider which include infrastructure such as construction of houses for mine workers and roads.

"From the inception of our operations we define the long term developments which are the extraction of mineral ore from underground, and smelting of the platinum concentrates which we are currently doing and from this stage that's when metal refineries are needed," he said.

Zimbabwe had an electricity deficit of about 900MW, resulting in the power utility resorting to load shedding.

The Government has given platinum mines two years to set up a refinery in the country after which it will stop processing export licences for semi-processed platinum.

Government believes that refining platinum locally would increase economic benefits for the country. However, the mining industry argues that current output of 300 000 ounces a year did not justify the setting up of the refinery.

Meanwhile, the small-scale mining sector has hailed the draft Minerals Policy saying if enacted into law it will complement the Indigenisation and Economic Empowerment Act.

The Indigenisation and Economic Empowerment Act empowers Zimbabweans to have a majority shareholding in companies in all the sectors of the economy.

Addressing stakeholders at a local hotel in Bulawayo last week, Mines and Mining Development Deputy Minister Gift Chimanikire said Government and players in the mining sector should support the new minerals policy.

He said the proposed law sought to address the colonial imbalances that were not mutually beneficial to the investing companies and the national Government.

In separate interviews, representatives from small-scale mining organisations said the proposed law would encourage equitable partnerships between local and foreign investors as well as progressively building local capital, skills and technological prowess.

Bulawayo Miners Association advisor Mr Ishmael Kagaru said the proposed draft set out the expectations for the mining sector to contribute not only to the revitalisation of the country's economy but more broadly to the development of its people including future generations.

"The proposed draft is the step in the right direction especially to small-scale miners who have been complaining that the 1961 Mines and Minerals Act was working in favour of foreign investors at the same time curtailing the growth of the mining industry by local players.

"It also helps in the revitalisation of the country's economy by advancing the interests of both present and future generations by giving them adequate indications on the country's investment opportunities," he said.

Among other objectives, the proposed Minerals Policy seeks to provide a framework for a minerals regime for the sustainable management of the country's mineral resources.

In addition, it seeks to guide interventions by Government institutions and other stakeholders.

It also seeks to establish an internationally competitive, stable and conducive business climate to attract and sustain foreign and local investment, while ensuring equitable distribution of benefits from mining activities to meet present and future needs.

Women in Mining (Bulawayo Chapter) chief executive officer Mrs Violet Mhute said the policy document enhanced the participation of indigenous Zimbabweans in mining and related linkage industries irrespective of gender or ethnicity.

"This proposed mineral policy comes at the right time especially when the government is spearheading indigenisation programmes and it will enhance the participation of local players in the mining sector. It also facilitates equitable access to the sector by all Zimbabweans with the requisite capabilities irrespective of gender and ethnicity," she said.

The Zimbabwe Artisanal and Small-Scale Mining Council president Mr Wellington Takavarasha said the policy would boost the operations of artisanal and small-scale mining industry which had the potential to create employment, generate income and help to reduce poverty in rural areas and stem rural to urban migration.

Source - chronicle