Zim studying Impala platinum refinery proposal

HARARE (Reuters) – Zimbabwe is considering a proposal for the construction of a platinum refinery from the world No. 2 producer of the precious metal Impala Platinum, the mines minister said on Thursday.

President Robert Mugabe's government has given platinum companies operating in Zimbabwe a deadline of two years to set up a refinery to add value to its mineral exports – or face a ban on unrefined exports.

Some industry insiders however argue the amount of platinum produced in Zimbabwe is too small to make construction of a $2-3 billion refinery economically viable.

Mining companies say there is not enough energy there to run a power-hungry refinery smoothly.

The government in January imposed a 15 percent tax on unrefined platinum, which miners say has increased the effective rate on royalties to 25 percent and made mining expensive.

Last month mines minister Walter Chidhakwa said Zimbabwe had shortlisted two companies to set up the refinery, which mining companies say will cost up to $3 billion, equal to almost 30 percent of Zimbabwe's gross domestic product.

Chidhakwa said he had held a meeting with the chairman of Implats on Wednesday on setting up a refinery.

"They (Implats) have got ideas which we are beginning to consider," he told reporters, but declined to give details.

"It's a big project and we have to look at a whole range of things. We have to think about the financing and the technology among others," he said.

Implats officials were not available for comment.

The platinum miner's Zimbabwean unit Zimplats said in January it had submitted proposals on building a refinery to the government, but declined to give any details.

Zimbabwe has the world's largest platinum reserves after South Africa. Companies operating there include top platinum producers Anglo American Platinum and Implats' Zimplats, the largest platinum miner in the country.

Platinum miners have so far transported the platinum they mine mostly to South Africa, where they already operate refineries, for processing.