eBusiness Weekly
Business Writer
Chamber of Mines of Zimbabwe (CoMZ) has cast a shadow over the country’s platinum group metals (PGMs) industry, predicting a challenging year ahead.
In a statement, the CoMZ expressed concerns about weak demand and a potential decline in PGM prices over the next 12 months and beyond.
“We anticipate the PGMs market to remain weak in the next 12 months,” the CoMZ said.
Platinum group metals encompass a range of valuable elements including platinum, palladium, and rhodium, primarily used in catalytic converters for automobiles and various industrial applications.
The recent softening in global PGMs prices, coupled with increasing cost structure, has significantly impacted the viability of Zimbabwean PGMs mining operations.
PGMs producers are now struggling to meet their production and revenue targets leading to a notable decline in profitability across the sector as reflected by Zimplats reporting losses for the first time in a decade.
The downturn is expected to result in suspension of some capital projects as well as discourage investment in new projects and exploration activities, further dampening prospects for the PGMs sector.
To minimise the impact of low prices, mining companies have taken measures to manage the cost of production, including improving efficiencies and deferring capital projects.
Companies also plan to ramp up production to compensate for revenue losses arising from low commodity prices. These initiatives, however, have remained insufficient to restore viability of their operations and some mining companies are now cutting back on the head count to supplement the initiatives.
“The industry is calling upon Government to intervene and assist in reducing costs specifically in areas including electricity tariff and fiscal charges to minimise mine closures and specifically to ensure that mining companies survive this difficult tide,” said the Chamber.
