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Zimbabwe’s platinum output to increase

ZIMBABWE’s platinum output will increase by two percent to 457 000 ounces this year, from 448 000 ounces in 2020, projections from the World Platinum Investment Council (WPIC) indicate.

Minister of Mines Winston Chitando

According to the WPIC quarterly report, platinum production in Zimbabwe increased by 11 percent to 120 000 ounces in the first quarter ended March 31, 2021 from 108 000 ounces in the comparative period.

“Platinum demand in the first quarter of 2021 continued the very positive growth trends of the preceding two quarters, as global vaccination programmes, plus government stimulus measures, sustained the pace of economic resurgence,” WPIC said.

The southern African country, which is home to the world’s second biggest known deposits of platinum after South Africa, has three platinum-producing mines — Zimplats, Mimosa and Unki.
Zimplats’ tonnes milled were stable at 1 700 million tonnes during the first quarter under review, compared to 1 701 million tonnes milled in the comparable period, while the delivered mill grade declined by two percent.

Mimosa’s platinum group metals (PGMs) production was up four percent, to 123 000 ounces during the year ended December 31, 2020, driven by an increase in ore milled.
Unki Mine recorded a three percent decrease in PGMs production during 2020, primarily due to the Covid-19 national lockdowns and disruptions.

Other upcoming platinum projects under different stages of implementation include Great Dyke Investments, Bravura, and Kuvimba Mining House.
Experts say platinum is likely to be Zimbabwe’s mainstay in the foreseeable future, thanks to the investments being made in value-addition and consistent reporting standards implemented by the current PGM miners.

The country is expected to finalise its platinum beneficiation framework this year, ahead of the introduction of penalties designed to encourage local processing of the mineral.
Government policy at the moment allows producers to export PGMs in concentrates or matte form. However, from January 1, 2022, a new penalty framework, which will work on a sliding scale depending on level of beneficiation will come into effect.

Meanwhile, the WPIC said demand for platinum increased by 26 percent or about 405 000 ounces year-on-year to more than 1,9 million ounces in the first quarter under review.
Supply also saw a strong recovery, with mines able to operate fully under Covid-19 protocols according to the council.
For 2021 total platinum supply is now forecast to rise 16 percent year-on-year to 7,883 million ounces.

“However, it will remain below pre-pandemic 2019 levels, while total platinum demand is expected to rise by five percent year-on-year to 8,041 million. As a result, the platinum market is forecast to remain in deficit in 2021, for the third consecutive year, with the shortfall expected to deepen to -158 million from our previous projection of -60 million,” WPIC noted.

Platinum prices averaged $1,162/ounce during the first quarter, up 29 percent year-on-year, and 23 percent quarter-on-quarter, representing the highest quarterly average price since the first quarter of 2015.

The council said as the global economy continues to recover from the ravages of the Covid-19 pandemic, supported by large scale government stimulus funding, more investors are considering an increased need for commodities, and are considering platinum.

“This attraction to platinum is enhanced as more investors become aware of platinum’s key role in the increasingly certain hydrogen economy.
“Platinum’s constrained supply and significant demand growth potential increases the likelihood of new and existing investors increasing their holdings.
“We believe this is likely to drive increased investment demand through 2021 and beyond,” WPIC said.

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