Zimplats Battles Production Slump and Rising Costs While Projects Progress
Zimplats reported a decline in mining volumes and metal output for Q3 FY2025, alongside a rise in operating costs, while advancing key capital projects on schedule.
- Six lost-time injuries recorded, safety remediation underway
- Mining volumes down 11% year-on-year and 4% quarter-on-quarter
- 6E head grade marginally up 1% year-on-year but metal in final product down 16%
- Operating cash costs rose 3% year-on-year due to power and mining resumption
- Major projects including Mupani Mine and Smelter Expansion progressing on budget
Safety Setbacks Amid Ongoing Commitment
Zimplats Holdings Limited reported six lost-time injuries (LTIs) during the quarter ended 31 March 2025, marking a setback in its safety performance. The company has initiated remedial actions and reiterated its commitment to a zero-harm workplace, underscoring the importance of safety as it advances operational and capital projects.
Production Volumes and Grades Show Mixed Trends
The quarter saw mining volumes decline by 11% year-on-year and 4% compared to the prior quarter, primarily due to reduced trackless mobile machinery (TMM) activity. However, the 6E head grade experienced a slight 1% increase year-on-year, attributed to improved ore supply from the resuscitated open-cast mining line. Despite this, metal in the final product fell 16% year-on-year, though it rebounded 8% from the previous quarter, reflecting operational challenges and inventory adjustments.
Cost Pressures and Operational Efficiency
Operating cash costs increased by 3% year-on-year, driven by higher power consumption from the new 38MW smelter and the restart of open-cast mining operations. Timing differences related to engineering component replacements also contributed to cost pressures. On a positive note, costs improved by 2% quarter-on-quarter, helped by lower mined and milled volumes. The cash cost per 6E ounce rose 6% year-on-year to US$1,026, reflecting the combined impact of these factors.
Capital Projects Advancing on Schedule and Budget
Zimplats continues to make steady progress on several major projects. The Mupani Mine development, designed to replace depleted ore from Rukodzi and Ngwarati mines, remains on schedule with US$342 million spent against a US$386 million budget. The Smelter Expansion and SO2 Abatement Plant projects are advancing well, with US$452 million invested to date within a US$544 million budget. Notably, the 35MW solar plant was commissioned in August 2024 and reached full capacity by December, completed within its US$37 million budget. Meanwhile, refurbishment of the Base Metal Refinery is underway with US$33 million spent against a US$190 million budget.
Exploration and Future Outlook
Exploration drilling continued with eight holes totaling 2,178 metres at Bimha and Mupani Mines, focusing on geological structures within the planned five-year mining footprint. These efforts aim to support future mine development and sustain production levels beyond current operations.
Overall, Zimplats navigates a challenging quarter marked by operational headwinds and safety incidents but maintains momentum in its strategic capital projects and exploration activities, positioning itself for recovery and growth in the coming periods.
Bottom Line?
As Zimplats balances production challenges with advancing key projects, the coming quarters will test its ability to restore output and control costs.
Questions in the middle?
- How will Zimplats address safety risks to prevent future lost-time injuries?
- What impact will the resumption of open-cast mining have on volumes and costs going forward?
- Can ongoing capital projects deliver expected production and environmental benefits on schedule?
