By Peter Bolder|
The future of Zimbabwe’s lucrative platinum mining hangs in the balance after investors said they would shun the troubled country fearing dictator Robert Mugabe’s threats to seize their mines.
Investors and analysts said during the launch of UK refiner Johnson Matthey’s platinum report in Johannesburg Tuesday that investment funds to Zimbabwe’s platinum sector were likely to dry up after current expansion projects were completed.
“It’s going to take another big chunk of capital investment,” said Peter Duncan, Johnson Matthey’s general manager for market research. “I wouldnt like to bet whether people will have confidence to (invest in expanding Zimbabwe’s platinum production).”
Mimosa Mining Company, a joint venture between Implats and Aquarius Platinum announced at the weekend that it was laying off 100 of its 1 700 staff, including senior managers. The company’s executive chairman, Winston Chitando claimed the move was triggered by falling metal prices and improvements in their work culture. However, insiders said the mine’s planned Phase 6 expansion had been shelved after the Mugabe regime ordered the company to surrender 51 percent of shares.
Although the company and the government agreed to start negotiations, there has been no progress in the discussions. The government apparently failed to raise the half million dollars to buy the shares.
Mugabe insists the government wants the shares for black upliftment but critics say the programme has been hijacked by his cronies. Mugabe told Zanu PF members on Friday that platinum producers will be banned from exporting the raw product as a way of forcing them to build a $2 billion refinery in the country. The miners say a refinery will only be viable if national production reches 500 000 ounces a year. Production in 2013 was projected by Johnson Matthey to be 400 000 ounces, an 18 percent rise from the prior year.
The miners also demanded that the authorities guarantee a stable supply of electricity and abandon damaging empowerment and anti-Western rhetoric.
By Peter Bolder|