Implats is seeking a meeting with Zimbabwe’s President Mnangagwa over new forex retention rules which now require retaining 70% of dollar receipts. This shift complicates investment and foreign exchange access, prompting the need for discussions. The CFO revealed the company’s reliance on borrowing for capital goods, and there are ongoing evaluations of vulnerable assets within the portfolio.
Impala Platinum (Implats) is seeking discussions with Zimbabwe’s government, particularly President Emmerson Mnangagwa, regarding new foreign exchange retention rules. The Reserve Bank of Zimbabwe has recently adjusted the retention rate, increasing it to 70%, elevating costs for miners as they acquire services and goods at local exchange rates. This has raised concerns within the company about the impact on investment.
Nico Muller, CEO of Implats, expressed the need for increased foreign exchange access, stating that discussions with the government are essential. The company aims to meet with both President Mnangagwa and Finance Minister Mthuli Ncube to address these challenges firmly. “It is not something I want to scrub under the carpet,” he remarked.
Meroonisha Kerber, Implats CFO, mentioned that the company’s 85% owned Zimplats had to resort to borrowing to finance capital goods because incoming dollar receipts were insufficient. She noted the strategic importance of borrowing locally in Zimbabwe while ensuring operational self-funding within the company.
Implats is also evaluating its investments in light of potentially low platinum group metal prices, with the Canadian mine Lac des Iles and Marula identified as vulnerable assets. Marula’s operation faces reserve depletions, emphasizing the need for phase two investment that was halted previously.
Cost-cutting measures, including job reductions, have largely been executed, leaving limited scope for further overhead reductions. Most current strategies involve portfolio re-evaluation, especially as several shafts in the Rustenburg division face operational challenges.
Despite challenges, Implats has significantly invested in the processing capabilities at Zimplats, demonstrating a long-term commitment to the region. Muller noted, “We have always been positive about our investment orientation with regards to Zimbabwe.” The company continues to maintain a positive relationship with the Zimbabwean government.
Implats is actively seeking dialogue with Zimbabwe’s government to address foreign exchange retention changes impacting its operations. Borrowing has become necessary for financing due to insufficient dollar receipts, posing risks to investment. Despite challenges, the company remains committed to Zimbabwe, emphasizing the importance of engaging with government officials for a sustainable operational framework.
Original Source: www.miningmx.com
