Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Zimplats lends ZESA US$25 million

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. 


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