Johannesburg - Diversified African Rainbow Minerals plans to invest in coal and platinum group metals (PGM) projects in Zimbabwe, a company official told Reuters.
"We are looking for PGMs and we are looking for coal. We are in discussion with a number of people in Zimbabwe to see whether there is something we can get on in terms of exploration," Dan Simelane, ARM's chief executive for exploration said in an interview on Wednesday.
He said authorities in Zimbabwe had improved the investment climate since the formation of a government by President Robert Mugabe and his rival Morgan Tsvangirai in February.
The new power-sharing government in Zimbabwe, which has the world's second-biggest platinum reserves after South Africa and large deposits of diamonds, coal and nickel, is keen to attract foreign mining companies to invest into a sector shunned due to fears that businesses could be expropriated.
Simelane said ARM, South Africa's second-biggest black-owned mining group, will also spend around $250m to develop the Konkola North copper project in Zambia.
ARM, which has interests in nickel, coal, iron ore, platinum, chrome and manganese in South Africa, said earlier this month it plans to spend more than R8bn on expansions and upgrades on its South African mines. A separate budget will be available for regional projects.
The company plans to divest from some operations that are no longer part of its project portfolio, including the Ojikoto project in Namibia, which has a gold resource of about 1.93 million ounces.
"(Ojikoto) is out for tender and a lot of companies have shown interest in that gold project and hopefully it will be sold before year-end or early next year," Simelane said.
He declined to name the firms interested in the project.
ARM's executive director, Stompie Shiels, also present at the interview, said the Konkola North copper project in Zambia, a joint venture with Vale of Brazil and the group's main project outside of South Africa, was expected to produce up to 45 000 tonnes of copper per year.
A decision to start mine development at the operation will be reached in the second quarter of 2010.
"We are fairly confident that this should go ahead. The project is going to be in the order of about $250m," Shiels said.
He said ARM will delay a decision whether to develop the Lupoto copper project in the DRC, where exploration since 2007, has yielded around 24 million tonnes in copper, for "three to four years". The company would only start mining developments when it reaches 100 million tonnes in available mineral resources.
Shiels said ARM expected global copper prices to remain volatile in the medium term.
"Commodity prices go in cycles, they go up and down and it will be fairly volatile, but we believe if the supply and demand fundamentals remain the same...we will see a long term average price of $4 000 a tonne."
Reuters