Impala Platinum (Implats) is requesting a meeting with Zimbabwe’s President Mnangagwa to discuss foreign exchange retention rules, which were recently adjusted, complicating investment for the miner. CEO Nico Muller emphasizes the need for open communication with government officials, while Implats also reassesses its portfolio due to low platinum group metal prices.
Impala Platinum (Implats) is actively seeking a meeting with Zimbabwe’s President Emmerson Mnangagwa to address concerns regarding recent adjustments in foreign exchange retention rules. The Reserve Bank of Zimbabwe has increased the percentage of dollar receipts retained from 75% to 70%, which exacerbates the challenges for Implats in making investments within the country. This change could lead to higher costs for acquiring foreign exchange as transactions will have to be made at local exchange rates.
Nico Muller, CEO of Implats, expressed the company’s apprehensions regarding the necessity for enhanced foreign exchange access from the Zimbabwean government. He emphasized the importance of discussing these issues directly with both the finance minister, Mthuli Ncube, and President Mnangagwa, stating, “It is not something I want to scrub under the carpet.”
Implats’ subsidiary, Zimplats, which is 85% owned by Implats, has recently borrowed funds to acquire capital goods due to insufficient cash flow from dollar receipts. Meroonisha Kerber, CFO of Implats, noted that borrowing in Zimbabwe is sensible from both an efficiency and discipline viewpoint, as operations must sustain their own capital needs.
Additionally, Implats is reevaluating its portfolio amid fears of continued low platinum group metal prices. The company’s Canadian mine, Lac des Iles (Impala Canada), and the Marula site have been identified as particularly vulnerable. Muller mentioned that without phase two investment, Marula has only two years of reserve life left, which has raised concerns about the mine’s sustainability.
Muller stated that most cost-cutting measures have been implemented, including job reductions, leaving little room for further cuts in corporate overheads. He referred to several shafts within the Rustenburg division being under significant operational stress, noting, “We are now at portfolio decisions.”
Despite these challenges, Implats has made significant investments in the processing capacity of Zimplats and has maintained a positive outlook regarding investment in Zimbabwe, recognizing the potential of the Great Dyke as an outstanding resource. Muller reaffirmed the long-standing, constructive relationship with the Zimbabwean government, stating, “We have had a very constructive, healthy, long-standing relationship with the government and that has not necessarily changed.”
In summary, Implats is seeking dialogue with the Zimbabwean government to address foreign exchange retention rules that hamper investment efforts in the country. CEO Nico Muller has indicated that maintaining good relations with governmental authorities remains a priority, despite the current financial challenges faced by the company. The situation calls for strategic reviews of Implats’ investments and operations to ensure sustainability amidst fluctuating platinum group metal prices.
Original Source: www.miningmx.com
