Impala Platinum (Implats) is requesting a meeting with Zimbabwe’s President to discuss new foreign exchange rules that complicate investments in the country. The recent increase in dollar retention by the Reserve Bank of Zimbabwe to 70% may heighten operational costs. Implats is also analyzing its asset portfolio due to lower platinum prices, while reaffirming its investment commitment to Zimbabwe.
Impala Platinum Holdings Limited (Implats) seeks to engage in discussions with Zimbabwe’s President Emmerson Mnangagwa regarding the nation’s foreign exchange retention policies, which present challenges for investment. Recently, the Reserve Bank of Zimbabwe adjusted its guidelines, increasing the percentage of dollar receipts retained from 75% to 70%. This adjustment could lead to elevated costs when acquiring goods and services at the local exchange rate.
Nico Muller, Chief Executive Officer of Implats, expressed the company’s concerns over the necessity for improved access to foreign currency in Zimbabwe, highlighting the importance of addressing these issues with the government. “We are concerned about the need for increased access to forex by the Zimbabwean government. It is something that needs to be discussed between our company and the government,” stated Mr. Muller. He emphasized that discussions would involve both the Minister of Finance, Mthuli Ncube, and the President.
Meroonisha Kerber, Chief Financial Officer of Implats, elaborated that the company’s 85% owned subsidiary Zimplats opted to borrow funds for vital capital investments due to insufficient cash inflows from dollar receipts. Kerber noted, “From an efficiency point of view it makes sense to borrow there [in Zimbabwe] as well as from a discipline perspective because… all our operations have to fund all of their own capital.”
Moreover, the company is evaluating its asset portfolio in light of potentially unfavorable platinum group metal prices. Muller indicated that the Lac des Iles mine in Canada and the Marula mine are particularly vulnerable, with the latter having a two-year reserve life without further investment. He also mentioned that significant cost reductions have already been implemented, including job eliminations.
Implats has made substantial investments to enhance the processing capabilities at Zimplats. “We have always been positive about our investment orientation with regards to Zimbabwe. We do believe the Great Dyke offers the best available resource out there,” Müller affirmed, while also noting the healthy, long-term relationship the company maintains with the Zimbabwean government.
Implats is proactively seeking dialogue with the Zimbabwean government to address the foreign exchange retention rules impacting investment. The company has expressed concerns about cash shortages affecting their subsidiary Zimplats, prompting a review of its assets amid fluctuating platinum prices. Despite challenges, Implats remains committed to its relationship with Zimbabwe and its investments in the region.
Original Source: www.miningmx.com
