Mining firm sees long-term potential in Zimbabwe

Anglo American Platinum has not received any rejection notice from the Zimbabwean government over its plan to transfer a majority stake in its local operation to black investors, the company’s chief executive said on Monday.

Neville Nicolau also said in an interview with Reuters that a potential seizure of its Zimbabwe operations would have little impact on its bottom line, adding the country had long-term potential for the firm.

Zimbabwe last week said it had rejected all 175 proposals it had received from foreign mining firms outlining their plans to comply with a controversial ownership law, and will kick out any firms that don’t meet a September deadline.

“We haven’t received any rejection from the government and remain in talks with them,” Nicolau told Reuters after a presentation of Amplats’ interim results.

He said discussions focused on how much past deals would count as credits towards compliance and how much would be straight equity.

The government of President Robert Mugabe says foreign mining firms must sell or transfer a majority stake of their operations there to local black investors or face losing their assets.

Amplats’ main Zimbabwean asset is its Unki mine, which is expected to produce some 30,000 ounces of platinum this year against a group target of 2.6 million ounces.

Nicolau said the loss of its Zimbabwean operations would hardly dent its balance sheet or income statement but the company was committed to the country because of its mineral wealth. Only South Africa has larger proven reserves of platinum group metals.

“If we had to shut down and they took 100 percent of the mine, and they kicked us out of the country ,it would be an absolutely nominal impairment on Anglo American Platinum … It might be 1% in terms of our asset value,” he said.

“So why do we bother going through the issues in Zimbabwe? It’s because the mine has a long life. It has the opportunity to increase production with relatively little capital.”

He said there were few options for miners looking for platinum metals.

“Other than South Africa, it’s really the only other place in the world where you find platinum group metals,” he added. (Reuters)

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