Tinashe Makichi Business Reporter
Platinum miner, Zimplats said it is deferring the project to set up a Base Metal Refinery (BMR) by almost a year as the drop in international metal prices has negatively affected its ability to fund the programme.
The programme, which was envisaged to be commissioned this July, is now expected to be completed next year.
A total of $12,2 million was spent on the refurbishment of the Selous Metallurgical Complex BMR project and an additional $9,9 million had been committed as at December 31, 2015.
Zimplats chief executive Alex Mhembere yesterday told the media that the project commenced according to plan, but was now facing challenges due to the limited availability of funds.
“The BMR project commenced according to plan, but its commissioning has been deferred due to reduced availability of funds as global metal prices continue to threaten the viability of our operations.
“The project has been deferred to a date that depends on the availability of the cash flows. The impact of the declining metal prices on cash flows has resulted in the reprioritisation of capital projects with some projects being deferred to future periods,” said Mr Mhembere.
He said the postponement of the commissioning is likely going to increase the cost of the project from the current budget of about $134 million.
Mr Mhembere said the company is yet to validate how much the project is going to cost now that there will be additional costs from the contractor’s side.
“The cost of the project is likely going to increase because as you know that postponing a project comes with costs. We hope to commission the project by early 2017,” said Mr Mhembere.
He said the Ngezi Phase 2 expansion project implementation is progressing well with a total of $447 million of the project budget having been spent as at December 31, 2015.
Implementation of the outstanding components of the Phase 2 expansion project remains on schedule for overall project completion in 2016.
Bimha Mine re-development is on schedule to reach full production in April 2018 as planned.