Home » Governance » Govt Demands Roadmap On Platinum Refinery

Platinum firms operating in Zimbabwe should come up with a concrete and detailed roadmap for the establishment of a refinery if Government is to reconsider the imposition of a 15 percent export levy on unprocessed platinum, Finance and Economic Development Minister Patrick Chinamasa has said.

The two-year ultimatum for platinum companies to establish a refinery was issued by President Mugabe in 2013.

Minister Chinamasa said platinum companies that are mourning that the levy would affect their viability should be honest with Government.

“We are not an unreasonable people, but they should respect our policy to value add platinum so that we have more value, more export proceeds from the export of our platinum and we can only achieve that if we have a refinery.

“They were given a long time, 2 years, by the former minister (of Finance) to establish a refinery. They didn’t do so. In my 2014 Budget I also gave them notice to establish a refinery and to my knowledge no concrete proposals have been submitted to Government showing a roadmap towards the establishment of a platinum refinery.

“So I want to say to the platinum producing companies, if they come up with a roadmap towards the establishment of a platinum refinery and the roadmap is clearly signposted and time-framed and the signposts are clearly verifiable I am sure if they do that and submit such a roadmap to the Ministry of Mines we can give serious consideration to going back to Cabinet to ask for a reprieve in the form of a deferment of the export tax in a manner that the deferment is synchronised and tied to the fulfillment of the specific verifiable commitment made by the platinum producing companies under such a roadmap.

“So clearly the ball is in their court to demonstrate to Government that they are serious about establishing a platinum refinery in Zimbabwe,” he said.

Minister Chinamasa, who initially defered the imposition of the levy in his 2015 budget statement said he was forced to implement the levy, which took effect on January 1, after he realised that there was no road map despite platinum companies having been given two years to do so.

“In my budget statement I read out a statement to the effect that I am deferring the imposition of the 15 percent export levy on unprocessed platinum on the understanding which I had at the time that the platinum producing companies had submitted a roadmap for the establishment of a refinery through the Chamber of Mines.

“After the delivery of that statement I then asked to see the roadmap and there was nothing, which indicated that I had been led up a garden path. So because there was no scrap of paper indicating a roadmap I then, in my Financial Bill, included the imposition of a 15 percent export tax on unprocessed platinum,” he said.

The minister’s comments come at a time when Impala Platinum Holdings Ltd said it had shelved a $70 million expansion at its Mimosa venture with Aquarius Platinum Ltd due to the levy.

Impala Chief Executive Officer Terence Goodlace told reporters on Thursday that the duty “is going to hit us extremely hard”.

With prices of platinum near a 5 12-year low, “the whole business could be at risk,” he said.

Anglo American Platinum (Amplats), which own Unki Platinum mine said the levy would cost the company about $10 million a year.

“We are talking very, very gly with the Government at the moment and we have explained the impact on the company,” Griffith said in an interview on the sidelines of the Mining Indaba conference in Cape Town last month.

“The impact is about $10 million (in lost earnings) but in a mine that has just been investing and putting capital in and that needs to start making money back because we have been investing very heavily in building houses too. Those things will stop, many of the programmes (will stop).”

Mines and Mining Development Minister Walter Chidhakwa has already indicated that Government will do everything possible to ensure that the refinery is set up in Zimbabwe.

He told participants to the annual mining and infrastructural indaba in October last year that Government now required proposals for new projects to include plans for value addition and beneficiation.

“I want to assure foreign and local investors that it is a matter of great importance for us and we will continue to work hard to ensure that this happens,” he said.

Source : The Herald