Zimplats plans to retrench

Zimbabwe's largest platinum producer, Zimplats, is set to retrench 25 managers as part of the company’s cost-containment measures in the face of declining international metal prices and a challenging economic environment.

Busi Chindove, Zimplats head of corporate affairs, told business daily yesterday that the retrenchment exercise was being necessitated by challenges the mining company has been facing in the last nine months.

“Labour is the single biggest cost line item in the company’s cost structure and has a bearing on both productivity and efficiencies. Taking cognisance of this fact one of the strategic cost containment initiatives being implemented by management is a labour rationalism exercise on the back of a review of the company’s top structure,” she said.

Chindove noted that engagement with the affected individuals was currently underway, prior to implementation.

Like most miners in the country, Zimplats has been facing a severe liquidity crisis that has been precipitated by a prolonged depression of metal prices, the impact of reduced production volumes arising from the collapse of Bimha Mine and the challenging business operating environment.

Chindove said Zimplats has been implementing other stringent cost control measures including cancellation or deferment of capital expenditure as part of the company’s survival strategies.

“Zimplats remains committed to the base metal refinery (BMR) project scheduled for commissioning in July 2016,” she said.

The company last year began refurbishments of the refinery — located in Selous, about 80km west of Harare — following mounting pressure from government on beatification of minerals to ensure that the country derives maximum benefits from the exploitation of its natural resources.

A base metal refinery may process platinum up to 60 percent of platinum group metals, which will be further processed by a precious metal refinery.

Zimplats suspended operations of its BMR, which separated minerals such as nickel, chrome and copper from platinum group metals, a few years ago after it had become prohibitively expensive to operate due to outdated technology.

The platinum miner — 87 percent owned by South Africa’s Impala Platinum — is one of Zimbabwe’s largest employers, with nearly 5 000 employees including contract labour.

Mining experts say the latest announcement by Zimplats, which comes after the Zimbabwe Statistical agency (Zimstat) recently said the mining sector shed over 4 600 jobs last year, said government must come up with viable policies to shore up the sector.

Mining is one of the economic pillars Zimbabwe is anchoring its economic revival.