Zimplats

1 2

Successfully implemented Phase I expansion to nameplate capacity of 180 000 ounces of platinum per annum.

Zimplats performance

Business summary

Aerial view of Zimplats’ Ngezi concentrator.

Zimplats’ safety performance remained world-class despite the 53% deterioration in the lost-time injury frequency rate to 0.69 per million man-hours worked. It continues to feature among the top mining operations in the Group in terms of safety.

FY2010 proved a truly outstanding operational year for Zimplats, crowned by the successful commissioning of the phase 1 expansion, essentially on time and within budget. This project involved the development of two new underground mines, Portals 1 (Ngwarati) and 4 (Bimha), a new concentrator at Ngezi and additional infrastructure. The concentrator was commissioned in July 2009 and reached nameplate capacity of two million tonnes in September 2009. As a result tonnes milled increased by 89%, from 2.2 million in the previous year to 4.1 million and platinum production in matte rose by 81% to 173 900 ounces. Full throughput of 180 000 ounces of refined platinum on an annualised basis will be achieved in this financial year.

Despite the dollarisation of the economy, which affected costs, higher production volumes resulted in unit costs declining by 22% to $1 007 per platinum ounce in matte. This firmly positions Zimplats as one of the lowest-cost primary producers in the world.

The political environment in Zimbabwe remains uncertain. Relations between coalition partners in the government of national unity are strained, causing indecisiveness at administrative level. The indigenisation regulations were gazetted earlier this year and require foreign companies to indigenise 51% of their shares or interests within five years. Zimplats is confident its proposals which incorporate agreements concluded with the government of Zimbabwe will comply with the legislation. Plans are in place for a minimum 15% equity stake with local participants. Dialogue with the relevant authorities is ongoing to ensure legal agreements with government are honoured.

Five-year outlook

The $450 million phase 2 expansion was approved in May this year. The project involves the development of a new two million tonne underground mine, Portal 3, an additional concentrator module at Ngezi, a dam and other infrastructure including 1 125 employee houses. Scheduled to commence early in FY2011, the concentrator will be commissioned in late FY2013 with Portal 3 reaching full throughput the following year. At nameplate capacity, milled tonnage will increase from the current 4.1 million to 6.1 million per annum and refined platinum production by 90 000 to 270 000 ounces per annum.

In the longer term with the appropriate investment climate, Zimplats has reserves to sustain one million ounces of platinum production. The next step to achieving this vision is a phase 3 expansion. A feasibility study incorporating a new smelter and base metals refinery in addition to the normal underground mine development and associated milling capacity is currently being undertaken.