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Zimplats records US$131million contribution to fiscus

Business Reporter

PLATINUM giant, Zimplats has reported a US$131million contribution to national fiscus in the period ending September 2018.

Presenting financial results, Zimplats Chief Finance Officer Stewart Magaso Mangoma said Zimplats’ contribution to government coffers has been on an upward trend since 2016, albeit a sharp decline in contributions in 2015 to US$47million. The upward trajectory however picked from 2016 where it contributed US$62million and US$86million in 2017.

Zimplats reported a full-year profit before tax increase of 64% to $166million from US$101million in 2017, with a net profit of a paltry US$3million.

Mangoma explained the low profit after tax profit achieved saying, ‘The biggest change came from deferred income tax which was US$5million last year and its now US$98million. The reason why deferred tax is high is because we changed our mining status from a special mining lease to a mining lease. The previous tax rate was at 15% and its now at 27.75% which led us to adjust our deferred tax.’

‘Our profit after tax is only US$3million, compared to US$46million last year, a drop of 93%,’ he said.

Deferred income tax surged by 1 860%.

Revenue for the period under review rose 14% to US$583million from US$513million the previous year due to an increase in sales volumes.

Cash worth US$195million was generated.

On the revenue contributed by metal, platinum was the major contributor at 38%, followed by palladium with 35%. Nickel contributed 9%, rhodium 7%, gold 6% while other metals contributed 5%.

Zimplats Chief Executive Officer Alexander Mhembere highlighted that since 2009, platinum contribution has been on a downward trajectory which has seen the metal contributing 68% of total revenue in 2009. Three years later in 2012, platinum contributed 55%, decreasing to 49% in 2015 and now currently 38% in 2018.

Said Mhembere, ‘Platinum as a metal is slowly losing its lustre in terms of being a precious metal and finding and drifting to its natural habitat which is as an industrial metal.’

‘The contribution of platinum as a metal is slowly depleting and is associated with the movement of platinum from being a precious metal that is used as a store of value besides jewellery, to an industrial metal like all other metals,’ he added.

Mhembere said the negative trends in platinum are in contrast to the behaviour of palladium which experienced upward growth, contributing 11% in 2009, 19% in 2012, 27% in 2015 and now commanding a good position of 35% in 2018, almost at par with platinum.

Out of a cash utilisation of $627 million in 2018, procurement costs were the largest expenditure which took up 43%.

Zimplats has two operating sites along the great dyke. The Selous Metallurgical Complex houses the smelter and concentrator. The mining operations in Ngezi has five operating mines. Final refining is transported to South Africa.

The mining giant, which is the leading platinum mining company in Zimbabwe milled 6 570 000 tonnes in the period under review, with 271 000 platinum ounces produced. Mining output of 6 801 000 tonnes was recorded.

No fatalities were recorded during the period under review. ENDS//

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