Anglo American Platinum flags Zim operating environment

17 Mar, 2023 - 00:03 0 Views
Anglo American Platinum flags  Zim operating environment

eBusiness Weekly

Nelson Gahadza

Anglo American Platinum Limited, a South Africa-based mining company has flagged three key material risks at its 100 percent owned Unki Mine which has been proactively managed through integrated risk management processes.

Anglo-American is the world’s largest primary producer of platinum, accounting for about 38 percent of the world’s annual supply.

The company produces a range of PGMs including platinum, palladium, rhodium, iridium, ruthenium and osmium.

However, according to its 2022 annual report, the company is prone to operational disruption due to social risks relating to community expectations and the political environment ahead of the 2023 elections.

Zimbabwe is due to hold general elections this year and the period in the build up to elections is considered volatile as incumbent Governments may come up with populist policies that damage the operating environments.

Anglo-American on its part said it will continue engagement with communities in line with social way programmes and providing visibility of Unki’s contributions to society.

“Unki will continue with stakeholder engagements and awareness programmes as well as communication with employees,” the company said.

Unki has over the years rolled out a number of corporate social responsibility projects covering health, education and agriculture, among others.

According to Anglo-American, the availability of reliable and secure power to meet operational requirements has been challenging in Zimbabwe.

The country’s power supply situation remains erratic to a level where some companies are experiencing an average of 10-12 power cuts daily while others go for days without power and before faults are resolved.

Power supply has remained constrained due to frequent breakdowns at the country’s major power stations.

In this regard, Anglo-American is expediting opportunities for the development of alternative energy supply, currently focusing on a photovoltaic power station (PV plant) at Unki while conducting regular engagement with local electricity utilities.

Several companies have invested heavily on solar power to alleviate the power situation and sustain operations.

In the mining sector, Zimplats is constructing a 35MW solar plant project which is Phase 1 of Zimplats’ 185 MW solar project with a total budget of US$37 million.

Africa focused transitional energy company Chariot Energy in partnership with Total Eren, a leading renewable energy Independent Power Producer (IPP) based in France are constructing a US$40 million 30MW solar plant that will provide electricity for the Karo Platinum Project.

The Karo project is an upcoming Tier 1 Platinum Group Metals (PGMs) mining operation situated on the Great Dyke of Zimbabwe which has already commenced works with first production targeted for July 2024. According to the National Development Strategy 1 (NDS1), energy is a key enabler to the acceleration of the country’s modernisation and industrialisation agenda as well as sustainable socioeconomic growth.

To address perennial power shortages in the country, the Government is undertaking several electricity generation projects, most of which are funded by extra-budgetary funds, loans and the private sector.

Another risk according to Anglo-American is the continued weakening of the local currency exchange rate against major currencies (USD/ZAR) and availability of foreign currency to meet business requirements.

The group said it will continue to engage with authorities to secure sustainable exchange rate policy and at the same time implement value preservation strategies for local currency balances.

“There is ongoing monitoring of Zimbabwean economic environment and enhancement of response plans,” read part of the annual report.

Platinum production at Unki Mines is projected to reach 250 000 PGM ounces in 2023 up from 232,100 ounces in 2022 largely driven by
the completed debottlenecking project.

Unki’s debottleneck project which was completed in 2021 was done at a cost of US$48 million with the expansion targeted to increase throughput capacity.

The country is envisioning a US$12 billion mining industry by 2023. PGMs are expected to contribute US$3 billion with production expected to jump from about 979 thousand ounces in 2018 to about 2, 5 billion ounces annually in 2023.

Gold, diamonds will contribute US$4 billion and US$1 billion respectively, while chrome, iron ore and carbon steel will contribute US$$1 billion while coal and hydrocarbons will contribute the same. Lithium at US$500 000 while other minerals will constitute US$1.5 billion.

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