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Friday, September 30, 2022
HomeBusinessZimplats Raise Q2 Production As Rising Costs Weigh on Margins

Zimplats Raise Q2 Production As Rising Costs Weigh on Margins

Platinum Group of Metals (PGMs) miner-Zimplats says its mined tonnage increased by 9 percent in second quarter to June and 4 percent year-on-year on recovery of Mupfuti Mine from the effects of lower trackless mining equipment availability.

Ruthenium, rhodium, palladium, osmium, iridium, and platinum (6E) head grade improved by 1 percent to 3.44g/t from 3.40g/t in the previous quarter, mainly driven by the increase in the contribution of high-grade ore from Mupfuti Mine.

The previous quarter’s head grade was adversely affected by processing low grade development ore from Mupani Mine stockpile.

Milled tonnes increased by 4 percent from 1 706 671 tonnes to 1 769 270 tonnes compared to the prior quarter due to an increase in the number of operating days and improvement in the milling rate.

“6E metal in final product increased by 2% to 151 125 ounces from the prior quarter, mainly due to the increase in mill volumes which was partly offset by negative inventory movement in the smelter,” said the company.

Production for the same period last year benefited from a release of smelter inventory. Resultantly, metal in final product was 2 percent lower than same period last year.

Total operating cash costs increased by 3 percent from the prior quarter, driven mainly by 9 percent and 4 percent increase in tonnes mined and tonnes milled respectively.

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A total of US$1.1 million was transferred from operating costs to closing stocks due to the planned build-up of run-of-mine ore stocks in preparation for the commissioning of the Third Concentrator Plant in August 2022.

A total of US$0.5 million was spent on exploration projects, with a further US$0.7 million committed as at 30 June 2022.

On major projects upgrade, the development of Mupani Mine and upgrade of Bimha Mine to replace Rukodzi, Ngwarati, and Mupfuti mines, which will be depleted in FY2022, FY2025, and FY2028 respectively, progressed during the quarter. A total of US$228 million had been spent on the project to date and US$81 million had been committed against a project budget of US$468 million.

The Third Concentrator Plant which will increase milling capacity by 0.9 million tonnes per year (equivalent to about 80 000 6E ounces) is on course for commissioning in August 2022.

Cumulative project expenditure as at the end of the quarter amounted to US$79 million with US$14 million committed against a project budget of US$94 million.

Implementation of the US$521 million smelter expansion and SO2 abatement plant project which commenced in the previous quarter is on course.

The project consists of the construction of a 38MW furnace and establishment of an acid plant for the abatement of sulphur dioxide generated by the smelter operations. A total of US$19 million had been spent on the project and US$218 million committed as at the end of the quarter.

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Procurement processes for the US$37 million Phase 1 implementation of the 185 MW solar project commenced during the quarter under review. Phase 1 is a 35 MW plant at Selous Metallurgical Complex scheduled for completion in FY2024.

Overall, the project has four implementation phases with the last phase scheduled for completion in FY2027 at a total project cost estimate of US$201 million.

 

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