Fin24

Zimplats profit tumbles on weak prices

2012-08-01 15:14

Harare - Zimplats, the Zimbabwe unit of Impala Platinum Holdings [JSE:IMP], posted a 52% drop in operating profit in the fourth quarter to June, mainly due to weaker platinum group metal prices.

In a statement released on Wednesday, Zimplats said operating profit was $25m, down from $52m in the previous quarter as metal prices were depressed during the period while operating costs rose 17% in line with higher sales volumes.

Revenue for the quarter was $114m, 11% lower than previously, despite a 13% jump in volume of metals sold, Zimplats said.

The miner said it had secured uninterrupted electricity supplies after giving state power utility ZESA a $25m loan to reduce its debt with Mozambique's Hidroelectrica de Cahora Bassa.

In return, Zimplats will be awarded power units and will not suffer power cuts for five years.

Zimplats, which is 87% controlled by South Africa's Implats, said in March it had agreed to a deal that would see it comply with Zimbabwe's requirement that 51% of shares in Zimplats be held by locals.

The firm said it was in ongoing discussions with the government over the implementation of the ownership agreement.

Zimplats said it was on course to commission its concentrator plant under a $460m expansion project in April 2013.