Safety Incidents and Operational Challenges Weigh on Zimplats’ Quarterly Performance

Safety and Operational Challenges

Zimplats Holdings Limited, a key player in the platinum group metals sector and member of the Implats Group, reported a challenging December 2024 quarter marked by operational setbacks and safety concerns. The company recorded five lost-time injuries during the period, prompting management to implement recommendations aimed at preventing future incidents. This safety focus underscores the ongoing risks inherent in mining operations and the company’s commitment to workforce wellbeing.

Production Volumes Under Pressure

The quarter saw a notable decline in production metrics. Mined volumes fell by 7% year-on-year and 8% quarter-on-quarter, primarily due to poor availability of trackless mobile machinery and intermittent power supply interruptions. Milled volumes mirrored this trend, decreasing by 6% year-on-year and 8% quarter-on-quarter, constrained further by mill reline shutdowns at concentrator plants. Despite these setbacks, the 6E head grade showed a modest 1% improvement year-on-year, benefiting from higher-grade ore from Rukodzi and Mupani mines.

Metal Output and Cost Dynamics

The combined effect of lower ore supply and operational constraints led to a 21% year-on-year drop in 6E metal in the final product. Concentrate volumes also declined by 5% year-on-year. On the cost front, total operating cash costs increased by 3% both year-on-year and quarter-on-quarter, driven by higher power costs linked to the expanded smelter commissioning and timing of major engineering replacements. However, when adjusted for metal produced, cash costs decreased by 10% year-on-year, reflecting inventory build-up ahead of converter commissioning. Operating cash costs per 6E ounce rose to US$935, up 13% year-on-year, reflecting the impact of lower production volumes.

Progress on Major Projects

Despite operational headwinds, Zimplats continues to advance its strategic projects. The Mupani Mine development, set to replace depleted Rukodzi and Ngwarati mines, remains on track for full production of 3.6 million tonnes per annum by the first half of FY2029, with US$339 million spent to date against a US$386 million budget. The smelter expansion and SO2 abatement plant project is also progressing well, with US$443 million spent out of a US$544 million budget. The expanded smelter phase is technically complete, and converter commissioning is underway. Additionally, the 35MW solar plant commissioned in August 2024 has reached design capacity, contributing to operational sustainability goals.

Exploration and Future Outlook

Exploration activities remain subdued amid depressed metal prices, focusing on geological modelling and resource updates rather than new drilling. The Base Metal Refinery refurbishment project has seen US$32 million spent against a US$190 million budget, indicating ongoing investment in downstream processing capabilities. While the current quarter’s results reflect operational and market challenges, the company’s continued investment in capacity expansion and sustainability initiatives positions it for potential recovery and growth in the medium term.