Minister, chairman say no progress
ZMDC gives no update on the $300m deal
A potential $300 million platinum refinery deal between Zimbabwe Mining Development Corporation (ZMDC) and Australian company Kelltech has suffered a stillbirth, as it emerged there has not been further progress since the deal was inked.
State-owned mining conglomerate, ZMDC, signed an agreement with the Australian firm in May last year for construction of the platinum refinery, which Cabinet approved during the administration of former president, Mugabe.
Zimbabwe had mulled a platinum refinery so as to beneficiate platinum group metals (PGMs) and therefore earn significantly more from exporting the mineral.
The Southern African nation is the third biggest producer of PGMs after South Africa and Russia, but has the world’s second largest deposits after its neighbour.
Current producers include Implats 87 percent Australia Stock Exchange listed unit Zimplats, in Mhondoro, Sibanye Stillwater and Implats 50 percent jointly-owned Zvishavane-based miner Mimosa and Anglo American’s Unki Mine, in Shurugwi.
Kelltech was expected to form a joint venture company with State-owned ZMDC, which signed the agreement on behalf of Government, and local partner Golden Sparrow.
The new joint venture company would be owned 49 percent by Kelltech, 30 percent by ZMDC and 21 percent by the Australian firm’s indigenous partner.
The refinery was expected to significantly increase the country’s platinum export earnings. The proposed platinum refinery would be built for between $200 million and $300 million. Kelltech would provide the funding for the plant.
ZMDC chairman David Murangari could not comment on the project because “I do not have anything on that”, “that has always been a ministry project.”
Murangari and Kelltech director Keith Liddel signed the agreement for the joint venture that will see the construction of the multi-million dollar platinum refinery.
Kelltech was then given the responsibility to find the appropriate site where the plant, which was expected to take 24 months to build, would be located.
Mines and Mining Development Minister Winston Chitando had earlier said that since the memorandum of understanding (MoU) between Kelltech of Australia and ZMDC, there had not been further progress regarding the deal.
“What was signed was memorandum of understanding between ZMDC and the providers of the technology, Kell, for the establishment of the platinum refinery.
“There has not been development towards signing of substantive agreement,” he said.
The plant would process concentrate from all of the country’s current active producers and those that would come later, provided capacity was there.
Currently, Zimbabwe exports its PGMs in predominantly raw form, which Government feels prejudices the country of optimum returns from mineral exports.
Government was so serious about the need to build local platinum refineries to a point where it once proposed and effected a 15 percent levy on raw exports.
This was, however, deferred last year cognisant of progress producers had made towards implementation of an agreed road map to construct value addition plants.
The levy has been deferred further for raw and semi-beneficiated platinum until January 1, 2019.
Government officials and a few private sector metallurgists had earlier been assigned to work with Kelltech in testing the kell technology at a pilot plant in Australia; concluding it was practically and commercially viable.
The PGMs refinery plant was to be built in modular designs with initial capacity to process 300 000 tonnes of platinum concentrate. PGMs account for nearly half of Zimbabwe’s mineral export earnings, $2,3 billion in 2017.
Government has for a long time now been nudging platinum mining companies to set up a local refinery, so that the country stops exporting raw platinum.
Government once gave miners a two year ultimatum up to end of 2012 to set up a refinery. When this did not work, Government started levying raw exports at 15 percent, which saw producers halting exports in protest in April 2016.
However, the levy was later scrapped as the protest starved the country of the much need hard currency. Platinum is the second biggest mineral export earner, after gold.
Currently, the country’s PGMs concentrate and matte, which is only produced by Zimplats, is exported to South Africa where it is refined, but suspicion abound significant earnings are lost on value addition and false declarations.