PLATINUM mining giant Zimplats says it will proceed with its US$460 million expansion plan after agreeing with Government on a process to produce an acceptable revised indigenisation plan by November 15 this year.
Zimplats chairman Mr David Brown said this after a joint Press briefing with Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere.
Minister Kasukuwere said he was happy with the process agreed with Zimplats as that will see the mining firm fulfilling the objectives of indigenisation.
The Government had last week resolved to cancel Zimplats' licence after the mining firm had failed to come up with an acceptable indigenisation plan.
The giant platinum miner had earlier indicated that the move by Government to localise 51 percent of its shareholding could affect its expansion plans.
Foreign-owned companies are required, in terms of the Indigenisation and Economic Empowerment Act, to cede for value at least 51 percent of their equity.
Sticking points to earlier discussions centred on the insistence by Zimplats that Government should recognise mineral reserves the firm released to the State as part fulfilment of indigenisation and empowerment requirements.
The Government had declined to award credits for the block of mineral reserves the platinum mining companies valued at an estimated US$150 million.
But both parties emerged from two days of discussions yesterday with consensus and a view to ensure the indigenisation process is mutually beneficial to all.
"I am happy to say that as a ministry and as a Government we have agreed on a process that will see us now move to achieve the empowerment objectives in line with the objectives of the laws of the land," said the minister.
As such, Zimplats and the Ministry of Youth Development, Indigenisation and Empowerment will immediately set up a community share ownership scheme.
After the joint press briefing Mr Brown pledged that Zimplats would continue with its current expansion drive to ramp up annual production by 90 000 ounces.
"We are working on a revised (indigenisation) plan and we will submit the plan by November 15. We will obviously know at that stage what the position is, so we can't comment on the details.
"With regards to our expansion plans we are busy with phase II at the moment and the cost is about US$460 million. That should add about 90 000oz of platinum per annum," said Mr Brown.
He said the ongoing phase II expansion programme would be completed by 2014 and any further expansion would be discussed with the Government.
Zimplats is currently producing about 180 000 ounces of platinum per annum, but the Ngezi Phase II expansion programme would raise output to 270 000 ounces per year.
This followed the successful completion of the US$340 million Ngezi Phase 1 expansion project, which raised platinum output by 88 percent to 180 000 ounces.
Continuous expansion investment has positively translated into increased revenue.
Zimplats recorded a 64 percent jump in full year after tax profit to US$200 million while revenue rose 30 percent to US$527 million.