Zimbabwe’s Platinum Plea
Zimbabwe is having second thoughts about what to do with the raw product unearthed from platinum mining.
Home to the world’s second-largest known platinum reserves, Zimbabwe usually sends what’s mined to neighboring South Africa for processing. Zimbabwean miners can only watch as the raw product is mined from their land, then sent across the border for refinement, where the real profit is made.
But recently, the country has stated that it’s willing to let foreign-owned platinum mining firms own majority shares in their local mining efforts. They’re making this offer in hopes of keeping the refinement processes on Zimbabwean land.
So what’s the catch?
All interested companies would be required to build a refinery in Zimbabwe.
Zimbabwean Mines Minister, Walter Chidhakwa, says that if foreign-owned mining firms are willing to establish a $2-billion refinery in the country, the government would allow the mines to become majority shareholders in a joint operation.
Chidhakwa goes on to explain that there’s already a substantial infrastructure established by South African mining companies that has been used to export the platinum thus far. He states, “[The material being mined] is made of up to 10 different kinds of minerals, which bears testimony to the fact that we can establish a base metal refinery, and at some point, establish a precious metals refinery.”
The government has made it clear that there’s room for negotiation with mining companies, as previously illustrated in a 2010 deal that enabled India’s Essar Group to own 54% of Zimbabwe Iron and Steel Company (ZISCO). This could ease the concerns of potential investors, and lends credibility to the new deal Chidhakwa is offering.
Last year, Zimbabwe reportedly produced 350,000 ounces of refined platinum, accounting for 6% of total world production.
Based on last year’s production, analysts predict that output needs to increase by 30% to justify the costs of a refinery, bringing the total necessary production number up to 500,000 ounces of refined platinum annually.