https://www.miningweekly.com

Aquarius says it respects Zimbabwe legislation

11th February 2015

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

Font size: - +

JOHANNESBURG (miningweekly.com) – JSE-listed Aquarius Platinum on Wednesday reported that its Zimbabwe-based Mimosa joint venture operation had again performed “strongly” in the six months ended December 31.

It produced about 60 000 oz of platinum in the second quarter of the current financial year – the highest ever quarterly production for the operation.

“This was a brilliant performance,” CEO Jean Nel said in a conference call, citing a reduction in the operation’s production costs, a steady increase in production and a consistent operating margin as keys to the mine’s success.

Unit costs at Mimosa decreased by 7% in the six months to December, compared with the first half of the prior financial year. This reflected the benefits of the company’s rationalisation programme, which was implemented in the 2014 financial year.

Further, Aquarius noted that a scoping study and prefeasibility study had been completed last year, which considered increasing the plant and mine hoist capacity by between 25% and 30%.

Capital expenditure of about $82-million would need to be invested in the expansion project.

The project was expected to deliver an additional 60 000 oz/y and a feasibility study was expected to be completed by September 2015.

However, the profitiability and success of the project was overshadowed by the introduction of a possible export tax and indigenisation by the Zimbabwe government.

The tax, at a rate of 15% of revenue, was first tabled in 2013 to promote beneficiaiton, but was deferred to January 1, this year. While the Zimbabwe Finance Minister announced that the government would defer the export tax of unbeneficiated platinum until January 1, 2017, the deferral was not gazetted.

“This effectively meant  that the tax was not legally suspended and, if implemented, will have a significant impact on the company,” Aquarius said in a statement.

“We continute to respect the laws of the country in which we operate. It is not our place to comment or criticise fiscal policy. We continue to share, with the government of Zimbabwe, a vision for a growing and increasing mining sector. We particulalry want to play a role in that,” Nel noted.

Further, he pointed out that the principle of in-country beneficiation of minerals “was a principle which we support, but as a producer, we can only support something that is structured and agreed over time”.

“It is up to us as producers in the country to come up with a proposal and submit it to the government and to a level where they are able to support it in a manner that shows alignment between industry and government on the way forward.

“If we do that, and I think we are in an advanced stage of doing so, I’m pretty sure that we will be able to come to an agreeement with [the] government on a further deferment of the royalty,” he noted.

Further, Aquarius said it understood that the essence of this “impasse” was a desire by the government to see “real progress” by the platinum producers towards establishing smelting and refining capacity in Zimbabwe.

“Mimosa’s stated position was that it was too small to establish smelting/refining capacity standalone, but has committed to work with other mines to establish smelting capacity over time,” the company said in a statement.

Mimosa would also continue to interact with the Ministry of Indigenisation and Ministry of Mines to work towards a sustainable solution but, to date, no agreements or definitive terms have been agreed between Mimosa and the  Ministry of Indigenisation.   

ROYALTIES
The proposal to render royalties payable by Mimosa nondeductible for income tax purposes was implemented on January 1, 2014, and impacted Mimosa from the start of the 2014 financial year on July 1, 2013. 

“This position has remained in the 2015 national budget. It has and will continue to negatively impact the company,” it said in a statement.

The financial impact of the nondeductibility of royalties was $4.2-million for the financial year to June 2014 and $2.6-million for the half-year to December 31, 50% of which was attributable to Aquarius.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Showroom image
Alcohol Breathalysers

Supplier & Distributor of the Widest Range of Accurate & Easy-to-Use Alcohol Breathalysers

VISIT SHOWROOM 
Magni SA
Magni SA

Magni SA is committed to developing the safest Telehandlers available to our customers for underground and surface mining, construction, forestry,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.134 0.168s - 106pq - 2rq
Subscribe Now