Zimplats, the Zimbabwean unit of Impala Platinum, has announced a new $1.8 billion (about R28 billion) capital shore-up to develop a new mine, expand existing production and processing capacity at existing ones, and to cater for power outages through a 185 MW solar power plant.
The Zimplats board approved "an overall capital investment strategy with a budget of $1.8 billion to be implemented over a 10-year period beginning in 2021, with $1.2 billion already approved for implementation," the company said in a statement on Monday.
As much as $969 million of the fresh capital outlay for Zimplats will be used for expansion of production levels through growth projects such as "the development of a new mine and increased processing".
This will boost its output from 6.7 million tons per annum to 8.8 million tons per annum while the in-country processing capacity will be increased to 380 000 tons of concentrate per year. Additionally, Zimplats will also establish a "facility to mitigate sulphuric dioxide emissions emanating from the current and expanded smelting capacity".
A programme to sustain production at current thresholds will be undertaken through mine replacements and upgrades at a cost of about $516 million, while upgrades of the mothballed base metal refinery to further beneficiate converter matte will cost $100 million.
Further to this, a new 185 MW solar plant "to augment power supplies" will also cost the company as much as $201 million.
The Impala Platinum owned Zimplats will likely benefit from the planned ramp up in production through lower production costs. The new capital budget is "expected to be funded by internally generated resources".
It has just reported that lower production volumes and higher operating costs in the quarter period to the end of September had resulted in a 4% quarter-on-quarter and a 7% year-on-year increase in operating cash costs of US$680 per ounce.