Zimplats lends ZESA US$25 million
04/08/2012 00:00:00
by Roman Moyo
PLATINUM miner, Zimplats advanced a US$25 million loan to ZESA which the
power utility used to reduce its indebtedness to Mozambique’s Hidroelectrica
de Cahora Bassa, enabling the resumption of power imports.
The Mozambican company had cut supplies to Zimbabwe after ZESA failed to
reduce its mounting debt but the facility extended by Zimplats would enable
power imports to resume.
Zimplats said, in return, ZESA would guarantee power supplies to its
operations for three years.
“During the quarter, Zimbabwe Platinum Mines (Private) Limited advanced a
$25 million loan to the power utility ZESA which was used to reduce the
utility’s overdue indebtedness to Hidroelectrica de Cahora Bassa of
Mozambique in respect of power imports,” the company said in its latest
financial report.
“The loan facility enabled Zimbabwe to resume power imports from Mozambique
to augment the country’s constrained power generation.
“The loan principal and interest were converted into power units which will
be redeemed over three years. In return, Zimplats is guaranteed
uninterrupted power supplies for its operations for five years.
Meanwhile Zimplats posted a 52% drop in operating profit in the fourth
quarter to June, due to weaker platinum group metal prices.
The company said operating profit was $25m, down from $52m in the previous
quarter as metal prices were depressed during the period while operating
costs rose 17%, in line with higher sales volumes.
“Operating costs were 17% above previous quarter in line with the higher
sales volume. In addition, the first tranche of $3.3 million was paid to the
Community Share Ownership Trust in terms of an undertaking to make available
to the trust, $10 million over a three year period,” the company said.
“Royalties continue to be accounted for at the higher rates set in terms of
the Finance Act whilst the company awaits resolution of the dispute which is
currently before the courts. As a result of the above, operating profit
amounted to $25 million, 52% lower than the previous quarter.”
Zimplats, which is 87% controlled by Implats , said in March it had agreed
to a deal that would see it comply with Zimbabwe’s requirement that 51% of
shares in Zimplats be held by locals.
The firm said it was in discussions with the government over the
implementation of the ownership agreement.
“A Joint Technical Committee comprising Government of Zimbabwe
representatives and management has been set up to work through material
issues pertaining to the agreement. Discussions are on-going and
shareholders will be updated on major developments,” the company said.