HARARE – Platinum group metals mining and marketing outfit, Anglo American Platinum (Amplats) said on Monday it was exploring the possibility of assembling solar plants at its Zimbabwe operating unit, Unki Platinum Mine, as it moves to address high electricity costs and potentially crippling blackouts in the country, which is battling to offset a slip in production.
Zimbabwe is enduring up to 18 hours of power blackouts per day, and industries are facing a crisis.
Unki has not been affected by Zimbabwe’s crippling power crisis so far, as it has a highly successful arrangement with State power producer, ZESA Holdings.
But the situation in Zimbabwe is volatile, with the power crisis already forcing scores of firms to shut down or review their operations.
This situation requires big electricity producers like Unki to act before much of the country is grounded.
Zimbabwe Platinum Mines, the country’s largest platinum producer, is also assessing the possibility of installing power plants at its Ngezi operation, about 140 kilometres south west of Harare.
Amplats is also launching of a tender process for a 75 MW photovoltaic solar energy plant at the high-performing Mogalakwena mine in South Africa, where other metal credits resulted in the cost of producing platinum entering the minus range of – $292/oz.
“The company was also assessing further potential solar plants at its processing operations and at Unki platinum mine in Zimbabwe, which had record first-half production,” Mining Weekly, the South African publication that tracks the mining industry, quoted Amplats CFO Craig Miller, as saying.
“Amplats CEO (Chris) Griffith said there had been no disruption to electricity supply in Zimbabwe in the arrangement of buying power directly from the national provider,” said Mining Weekly.
Amplats said Unki had not been affected by swift changes on Zimbabwe’s monetary front in the past few months, but it was concerned by the impact of hyperinflation on its staff in Zimbabwe.
The country’s inflation rose to 176 percent in June, from 97,85 percent in May, the hifhest rate in Africa.
Basic commodity prices have been rising in the past few months, leaving most workers unable to afford.
“The company had experienced no currency disruption in Zimbabwe and described the currency change as having both positives and negatives for Amplats, the positives being that as the company translated a portion of its US dollars into local currency, market related rates were being achieved, as opposed to the one-to-one translation previously,” noted Mining Weekly.
“However, we do see the impact on inflation coming through, not necessarily into our accounts, but it is something we’ll monitor particularly as it relates to the wages of our employees,” it quoted Miller as saying.
Amplats recorded a spectacular 120 percent increase in half-year headline earnings per share.
Amplats’s half-year earnings more than doubled helped by higher metals prices and a stock count adjustment, the South African mining company said.
Higher prices for precious metals and a weaker rand currency have improved operating conditions for South African producers.
Amplats said headline earnings per share (HEPS) for the six months to June 30 rose by 120 percent to 28.15 rand ($2.02) per share from 12.82 rand a year earlier.
The price of platinum XPT= has risen 7.1 percent in 2019 to set the metal up for its biggest gain in seven years.
Earnings were also supported by a stock gain of 1 billion rand.
“We’ve seen steady production from our operations, though certain headwinds, including Eskom power shortages and strike action at Mototolo, have impacted our first half performance but we expect to see a stronger performance in H2 2019,” Griffith said in a statement.