Implats has requested a meeting with Zimbabwean President Emmerson Mnangagwa to discuss restrictive foreign exchange retention rules recently altered by the Reserve Bank of Zimbabwe. This change affects investment capabilities, pushing Implats to borrow for capital expenses. The company is also assessing its portfolio in light of poor metal prices, maintaining a positive outlook toward their investments in Zimbabwe.
Implats, the parent company of Zimplats, has requested a meeting with Zimbabwean President Emmerson Mnangagwa to address concerns surrounding the country’s foreign exchange retention rules. The Reserve Bank of Zimbabwe recently raised the portion of dollar receipts it retains from 75% to 70%, significantly impacting the miner’s investment capabilities in the nation. This increase in retention creates additional costs for foreign exchange, as local exchange rates apply to goods and services.
Nico Muller, CEO of Implats, emphasized the necessity for expanded access to foreign currency as a crucial topic for discussion with both the President and Finance Minister Mthuli Ncube. “It is not something I want to scrub under the carpet,” stated Muller, highlighting the urgency of the matter.
According to Meroonisha Kerber, CFO of Implats, the firm’s Zimplats division had to borrow funds to acquire capital goods due to a shortfall in cash from dollar receipts. “From an efficiency point of view it makes sense to borrow there [in Zimbabwe],” noted Kerber, identifying both operational and financial discipline as factors influencing this decision.
Implats announced it is currently reviewing its portfolio in light of ongoing poor platinum group metal prices, with particular concern for its Canadian mine, Lac des Iles, and the Marula mine. Muller remarked that Marula, lacking phase two investment, only has two years of reserve life remaining.
In a discussion about possible cost reductions, Muller mentioned that significant cuts, including job losses, have already occurred, and few options for further reduction in corporate overheads remain. He acknowledged that some shafts in the company’s Rustenburg division are operating under challenging conditions.
Although faced with these challenges, Implats has made substantial investments in Zimplats’ processing capacity. Muller stated, “We have always been positive about our investment orientation with regards to Zimbabwe” and commended the resource potential of the Great Dyke. He also reaffirmed the company’s longstanding, constructive relationship with the Zimbabwean government.
Implats is actively seeking to engage with the Zimbabwean government over recent changes to forex retention rules that hinder its investment potential. The company has had to adapt financially by borrowing for capital needs in Zimbabwe. With ongoing uncertainties in platinum group metal prices, Implats is evaluating its assets, particularly in Canada and local operations. Despite these pressures, the company remains committed to its investments in Zimbabwe and values its relationship with the government.
Original Source: www.miningmx.com
