Zimplats capital expenditure reaches $1,3bn

HARARE - Zimplats -- Zimbabwe's largest platinum producer -- has spent over $1,3 billion on its operations in the country in the past 13 years, businessdaily has learnt.

Its annual integrated report released on Wednesday, the platinum miner said it has also paid $513 million to government in the form of income tax, royalties, customs duties and pay as you earn from 2002 to 2015.

The latest development comes after the Impala Platinum subsidiary reported a record $74 million loss for the full year on Monday after being hit by a hefty one-off tax repayment and falling global sales of the metal.

It was the only second time in the company’s history that it has reported an annual loss, the other being in 2009.

Zimplats, which is 87 percent owned by Impala Platinum Holdings, the world’s second-largest platinum producer, said it had to pay an additional $55,3 million in taxes during the year to June to cover the period 2004-2014, after losing a court case in a long-running dispute with the tax agency over payment of additional profits tax.

In addition, it said its revenue fell 29 percent to $408 million for the year after sales of platinum, palladium, rhodium and gold declined 20 percent.

The group’s chief executive, Alex Mhembere, said a 12 percent fall in gross revenue per platinum ounce from $2 457 to $2 167 also arose from declining metal prices, while cost of sales at $316 million was five percent lower than the previous year’s $332 million.

“Gross profit margins deteriorated from 42 percent in prior year to 23 percent in the current year due to lower metal prices and the impact of lower production and sales volumes on fixed costs,” he said.

In the period under review, administrative expenses for the year at $44,1 million were marginally higher than the $43,8 million reported in the previous year.

Operating cash cost per platinum ounce increased by 18 percent from $1 319 in the full year to June 2014 to $1 551 in the period to June this year mainly due to the impact of the lower production volumes on fixed costs.

Zimplats said its production of platinum matte fell to 190 027 ounces, compared to 239 660 ounces in 2014, due to weaker demand.

Zimbabwe ships its platinum matte for further processing at refineries in South Africa but President Robert Mugabe is pushing producers to set up local refineries.

Zimplats said it had started upgrading its mothballed base metals refinery to process platinum locally but would still send it to South Africa for the last stages of refining.

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