BHP pulls out of Zimbabwe's largest platinum group metals (PGM) mining project, citing ongoing losses.
With BHP gone, the venture hangs by a thread, as the joint partner faces a funding shortfall.
THREAD 🧵: On a Date with Zimplats Holdings Limited - Pt 2
#1. History
After nine months without a CEO, American Paul Anderson took over as CEO of BHP in 1998.
The company was struggling with internal issues: talent was leaving, earnings and stock prices were down, and several recent projects had failed.
Paul Anderson and his management team needed to rescue BHP from the brink of collapse.
They listed all the projects that had consistently under performed, leading to the sale of their platinum assets in Zimbabwe at a loss to their partner, Zimplats.
In 1999, Zimplats acquired BHP's interests in the Hartley and Mhondoro platinum joint ventures, which included a concentrator and smelter.
The Hartley Platinum project was halted and placed on care and maintenance while Zimplats focused on the Ngezi project.
Care and maintenance in the mining industry refer to processes and conditions on a closed mine site that may resume operations later.
During this phase, production stops, but the site is managed to ensure it remains safe and stable.
In 2001, feasibility studies indicated that the Ngezi platinum project offered better outcomes with limited upfront resources.
Consequently, the cash-strapped Zimplats pursued the Ngezi project, securing funding from Impala Platinum Holdings (Implats) & ABSA.
The funding helped Zimplats to develop the Ngezi open pit mine with a capacity to produce +2 million tonnes per annum (mtpa)
and
Construction of an 80 kilometre tarred road linking Ngezi & Selous for transportation of ore to Selous Metallurgical Complex (SMC)
Ngezi replaced the failed Hartley mine, reviving the SMC from the original BHP-DG project.
Now, efforts are focused on revamping the Base Metal Refinery (BMR) at SMC. BMR separates minerals like copper from PGMs thereby boosting revenue generation.
Zimplats also entered into an agreement with Impala Refining Services Limited (IRS), an Implats subsidiary that refines and markets (PGMs) and base metals.
2005, Implats secured 87% stake in Zimplats by purchasing ABSA stake and minority shareholders.
Zimplats embarked on expansion projects, increasing mining and concentrator capacity.
In 2019, Zimplats' special mining lease expired and was replaced by two new leases.
Development of Mupani Mine to replace the soon-to-close Rukodzi and Ngwarati Mines.
Today, we learn a valuable lesson for our investment plan: seek advice from experts. Jerry Ellis, the former CEO of BHP, championed the Hartley project but ignored advice from South African platinum miners, resulting in massive losses for BHP.
This is part two of On a Date with Zimplats Holdings. On part three we look at its operations.
If you are interested in investing in Zimplats Holdings which is listed on the @ASX but reside in Zimbabwe please check out this article.
greedysouth.co.zw/2022/12/how-to-invest-in-australia-and-us.html?m=1
Each Sunday will be on a Date with a company listed on the @ASX.
The purpose of this thread is to have a minimum appreciation of listed firms.
Disclaimer: Do not misconstrue this thread as investment advise DATE companies before you buy its shares