Implats is requesting a meeting with Zimbabwe’s President Mnangagwa to discuss new foreign exchange retention rules that complicate investment. The company is also facing financial pressures and assessing its portfolio amidst weak platinum prices, while affirming a long-standing positive relationship with the Zimbabwean government.
Impala Platinum (Implats) is seeking a dialogue with Zimbabwean President Emmerson Mnangagwa concerning recent foreign exchange retention policies that hinder its investment capabilities in the country. The Reserve Bank of Zimbabwe has raised the dollar receipts retention rate to 70%, up from 75%, escalating the costs associated with foreign currency transactions as they now align with the local exchange rate.
CEO Nico Muller has expressed concerns regarding the urgent need for improved access to foreign exchange and emphasized the importance of discussing these matters with both the government’s finance minister, Mthuli Ncube, and President Mnangagwa. “It is not something I want to scrub under the carpet,” he remarked, underlining the necessity of addressing the situation.
The 85%-owned Zimplats operation of Implats had to resort to borrowing to finance capital goods due to insufficient dollar receipts. CFO Meroonisha Kerber noted that this strategy is beneficial for operational efficiency and financial discipline, especially since all operations are expected to fund their capital independently.
Implats is currently evaluating its portfolio in response to potentially extended weak prices for platinum group metals, with the Canadian mine Lac des Iles and the Marula project identified as the most at risk. Muller pointed out that Marula’s reserves would deplete rapidly without further investments, which have been on hold since last year.
The company has implemented substantial cost-cutting measures, including workforce reductions, but further reductions in overall corporate expenses are now minimal. Muller highlighted that they are at a stage of making critical portfolio decisions, acknowledging some shafts in the flagship Rustenburg division are underperforming.
Implats has committed significant resources to enhancing the processing capacity at Zimplats, and Muller affirmed, “We have always been positive about our investment orientation with regards to Zimbabwe. We do believe the Great Dyke offers the best available resource out there.” He noted a constructive relationship with the Zimbabwean government has been long-standing and largely unchanged.
Implats is proactively addressing its investment challenges in Zimbabwe by seeking discussions with government officials regarding foreign exchange rules that have become increasingly burdensome. The company is also reassessing its portfolio amidst fluctuating platinum prices, while maintaining a commitment to investing in its operations in Zimbabwe. These strategic conversations and decisions underscore Implats’ interest in sustaining its operations within the challenging regulatory landscape of Zimbabwe. Despite the obstacles, the company expresses a positive outlook regarding the resource potential in the region.
Original Source: www.miningmx.com
