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(NEWZIMBABWE) Implats must exit Mimosa: Kasukuwere

Implats must exit Mimosa: Kasukuwere
19/02/2012 00:00:00
by Business Reporter

THE Zimbabwe government wants South Africa-based Impala Platinum (Implats) to give up its stake in Mimosa Platinum, Empowerment Minister, Saviour Kasukuwere has said. In addition to majority control of Zimplats, Impala --- the world’s second largest platinum producer – also 50-50 joint owners of Zvishavane-based Mimosa Platinum Mine with Aquarius Platinum.

After complying with the country’s empowerment laws Impala’s interest in Mimosa would be reduced to about 24.5 percent but Kasukuwere said even that left the company with too much control over the sector.

"Implats cannot be allowed to maintain a 24.5 percent portfolio investment in Mimosa while they have their hands full with the massive capital expenditure that will be required at Zimplats,” Kasukuwere told state media.

"They cannot have their cake and eat it too. They have to make space for Aquarius, as Mimosa is a very significant investment for Aquarius but is a drop in the ocean for Implats.

Kasukuwere said Impala’s exit would allow Aquarius to give greater attention to Mimosa since the company would become a major part of its asset portfolio.

"Having two minority shareholders splitting the non-indigenous 49 percent, with each holding 24.5 percent, will be very damaging for Mimosa, as the investment will become a portfolio investment for both Aquarius and Implats, and the company will be left without a shareholder of reference for funding and technical support,” he said.

“Neither of them (Impala and Aquarius) will be sufficiently incentivised to support any meaningful capital expenditure, and the company will not be able to embark on the next expansion phase to double production.”

Kasukuwere also added that having a single large majority shareholder would help Mimosa raise the US$300 million needed for an expansion programme expected to double output at the mine.

"Using a notional vendor financing structure to implement the indigenisation, with the support of a strong minority shareholder holding 49 percent, the company will be positioned to raise the required funding from some financial institutions, who have been sounded out,” he said.

"The financial institutions would only be interested in funding expansion capital, but they will not fund a buy-out of the existing shareholders. The funding would need to be injected into the operating entity as a loan, based on the feasibility study and the mining expansion plan."

However Mimosa managing director, Winston Chitando said changes in the company’s shareholding structure would not affect the expansion programme.
"We are planning phase six mine expansion and we have undertaken a feasibility study,” he said.

"The expansion would bolster revenue generation, profitability, operational costs and annual platinum output, which currently stands at 195 000 ounces per annum."

Labels: IMPALA PLATINUM, PLATINUM, SAVIOUR KASUKUWERE

posted by MrK @ 6:47 PM