JOHANNESBURG – Tharisa, the publicly traded South African platinum and chrome miner run by the Pouroulis family, has the right to take over a platinum mine project in Zimbabwe that could ultimately cost $4.2-billion.

The company in June last year paid $4.5-million for a 26.8% stake in Karo Mining Holdings, also run by the family. Karo is overseeing the project, which is seen by the government as key to reviving the economy from a two-decade slump. The mine could be Zimbabwe’s biggest platinum operation.

While Zimbabwe has the world’s second-biggest platinum deposits, their development has been stymied by political instability, economic collapse and a controversial local-ownership law that only recently was softened. Impala Platinum Holdings, Anglo American Platinum and Sibanye Gold have operations in the country.

The “option to acquire the balance of the equity in the project economics make sense,” Tharisa said in a response to questions. The Johannesburg-based company had previously said it could increase its stake in the project, without being more specific.

Karo is expecting to publish how much platinum it believes is in the 23 903 ha concession, in a so-called resources and reserves statement, in December, Tharisa said. The company is focusing exploration at a depth of 50 m to 150 m, significantly shallower than the world’s biggest platinum mines in South Africa.

In addition to the mine, which the government estimates will produce 1.36-million ounces of platinum group metals by 2024, Karo Power, another related company, may install 300 megawatts of solar power.

Besides Karo, the government expects production from existing mines to be 1.03-million ounces of platinum group metals by 2023 while a project, the identity of which will be disclosed in December, will produce 108 000 ounces. Great Dyke Investments, a venture between Russian and local investors, will produce 290 000 ounces in 2023, the government said. Current national output is 979 000 ounces.

Tharisa should exercise caution before taking over the whole project, given the state of Zimbabwe’s economy, said Luvuyo Booi, an analyst at Noah Capital Markets, who rates the company as a buy. The country is experiencing hyperinflation and gross domestic product is expected to contract this year for the first time since 2008.

“Its a high-risk jurisdiction,” he said. “I would rather they do it in small tranches.”