ZIMPLATS says depressed metal prices have seen an increase in net borrowings by over 50% to US$66 million as the company sought money to sustain operations.
Report by our Staff In the financial year ending June 30 2012, Zimplats chief executive officer, Alex Mhembere, said metal prices were on the downward trend, largely due to challenges in the American and Eurozone markets and the slowdown in the economic performance of China.
Platinum is used as an auto-catalyst in the automobile industry and the problems facing the world’s major platinum buyers mean reduced demand for automobiles. Mhembere said as a result of the depressed prices, net borrowing had increased by US$26 million from US$40 million recorded in the previous financial year. Mhembere said despite the depressed prices that have resulted in some Platinum Group Metal (PGM) producers in South Africa closing down, Zimplats, a unit of South Africa’s Impala Platinum, had not been spared either.
The depressed prices came at a time platinum ounces production had increased to an all-time high of 187 100 ounces. The Zimplats boss was worried that the gap between the platinum price per tonne and the cost per platinum ounce was narrowing, spelling doom for the company. However, he hoped prices would improve towards the end of the year.
