Zimplats reported modest increases in mined and milled volumes alongside a sharp jump in 6E metal production due to inventory processing. Operating cash costs rose notably, reflecting higher volumes and maintenance spend, while key capital projects remain on track.
- Mined volumes up 4% year-on-year
- 6E metal in final product up 14% year-on-year
- Operating cash costs increased 25% quarter-on-quarter
- Mupani Mine and smelter expansion progressing within budget
- One lost-time injury reported in the quarter
Production Gains Driven by Inventory Processing
Zimplats (ASX:ZIM) posted a 4% year-on-year increase in mined volumes to 2.118 million tonnes in the June quarter, supported by improved availability of trackless mobile machinery. Milled volumes rose 6% year-on-year, reaching 2.098 million tonnes, reflecting stable plant operations and higher mining output. Notably, 6E metal in the final product surged 14% compared to the prior year, largely driven by a 179% quarter-on-quarter jump in metal production in converter matte. This spike was attributed to processing 63,000 ounces of concentrate inventory that had accumulated during furnace maintenance in the previous quarter, reducing inventory levels to 24,000 ounces at period-end.
Costs Rise on Maintenance and Higher Production
Operating cash costs climbed 25% from the March quarter to US$207.26 million, and were 51% higher than the same quarter last year. The increase was primarily due to higher production volumes across mining, processing, and smelting operations, combined with additional discretionary maintenance and infrastructure spending. While the operating cash cost per 6E ounce decreased 13% from the prior quarter to US$1,132, it remained 38% higher year-on-year, reflecting the impact of increased costs and lower head grades. The company’s prior period benefited from accumulated power credits from its 35MW Phase 1 solar plant, which did not recur this quarter.
Major Projects Progressing on Schedule
Capital projects remain firmly on track. The Mupani Mine development and upgrade aims for full-scale production capacity of 3.6 million tonnes per annum by FY2029, with cumulative expenditure of US$364 million against a US$386 million budget. The smelter expansion and SO₂ abatement project also continues as planned, with US$478 million spent compared to a US$544 million budget. Meanwhile, the 45MW Phase 2A solar project is advancing steadily for completion in FY2027, increasing Zimplats’ total solar capacity to 80MW. The tailings storage facility expansion reached technical completion for Phase 1 within budget, and Phase 2 is progressing well, securing concentrator operations through to FY2049.
Safety and Operational Notes
Safety remains a focus, with one lost-time injury recorded during the quarter. Management continues to prioritise embedding a proactive safety culture in pursuit of a zero-harm goal. The South Pit Mine was depleted at the end of June 2026, marking a milestone in the company’s mining operations. Upcoming furnace maintenance scheduled for September and October is expected to cause further concentrate inventory buildup, planned to be released by the end of Q3 FY2027.
Bottom Line?
Zimplats’ production momentum is clear, but rising costs and upcoming furnace maintenance pose challenges to watch in the next quarter.
Questions in the middle?
- How will the upcoming furnace maintenance impact production and costs in Q3 FY2027?
- Can Zimplats control operating cash costs amid higher maintenance and infrastructure spending?
- Will the Mupani Mine upgrade meet its FY2029 capacity target within budget?