Breaking News
0

Amplats CEO seeks friendlier Zimbabwe mining laws to lift investment

Stock MarketsMar 01, 2018 08:50AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Amplats CEO seeks friendlier Zimbabwe mining laws to lift investment

By Zandi Shabalala and Peter Hobson

LONDON (Reuters) - Zimbabwe must offer foreign miners a consistent legal framework, the right to keep a controlling stake in operations and a greater share of profits to encourage investment, the head of Anglo American Platinum said.

The country, home to the world's second largest reserves of platinum after South Africa, is pinning hopes on a recovery in its mining industry after a coup that pushed out veteran leader Robert Mugabe, whose rule saw the economy plunged into chaos.

But decades of laws that deterred investors with tough terms and frequent changes, low global platinum prices and a crumbling economy have left Zimbabwe's mineral wealth largely untapped.

"We are not investing in any material growth," Chief Executive Chris Griffith told Reuters, adding that Amplats was considering investing in a small process to optimize operations, a process known as "debottlenecking".

"But that is not betting the farm on Zimbabwe yet," he said, adding that terms now on offer and an uncertain global outlook for platinum meant the world's top producer of the metal had no immediate plans for major investment in Zimbabwe.

The southern African nation requires platinum and diamond companies to hand over at least 51 percent of operations to the government, a rule that had extended to the rest of the industry until it was changed last year for other metals.

Amplats, which owns the Unki platinum mine and is building a $62 million smelter, would be among major multinationals that the new mining minister, Winston Chitando, would hope to woo as the nation prepares for elections in six months.

But platinum prices are hurting those recovery prospects.

The industrial precious metal is down more than 50 percent from a record high of nearly $2,300 per ounce in 2008 due to a supply glut and shrinking demand from autocatalyst makers and jewelry buyers in China, the world's biggest consumer.

"CHOPPING AND CHANGING"

Griffith met Zimbabwe's Chitando to discuss issues plaguing the industry, including laws and rules on processing that he said had changed three times since work on Amplats' new smelter started.

The Amplats CEO told the minister that constant changes made taking any investment decision difficult.

"I said (to Chitando): 'You think I will bring half a billion dollars to Zimbabwe when you guys keep chopping and changing the rules? There is no way I will do that.'"

Unki, the smallest of three platinum mines in Zimbabwe, is Amplats' only operation outside South Africa.

The smelter under construction will produce a matte product that will be sent to the company's refinery in South Africa.

As well as concerns about not keeping a controlling stake, miners were concerned that companies were only allowed to retain 20 percent of their foreign earnings, Griffith said.

Following years of cost cuts and asset sales, Amplats paid its first dividend in seven years last week.

"The market is improving all the time so as we get to that position one of the things that will be a key consideration is: does the market want the extra ounces?" he said.

Zimbabwe will impose a 15 percent penalty tax from Jan. 1, 2019 on exports of platinum producers which do not build refining facilities in the country, Chitando told a mining conference on Wednesday.

Impala Platinum (J:IMPJ), Zimbabwe's largest platinum producer, said last year "neither the smelter nor the export levy is affordable" and could lead to the closure of its Mimosa mine.

Amplats CEO seeks friendlier Zimbabwe mining laws to lift investment
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email