Zimbabwe authorities have given platinum miners until 18 January to submit proposals to build a refinery by the end of the year.
The country’s authorities have also warned that failure to set up the refinery by December would lead to a ban on raw metals exports.
“[Authorities] are talking about a 15 per cent levy effectively on revenue, and [platinum miners] already paying roughly 10 per cent royalties. That would bring the total charge to roughly 25 per cent of revenue, which is certainly a number which is hard to justify in a global context,” Stanlib mining analyst Kobus Nell told CNBC Africa.
“From a company’s perspective, that does not justify any sort of capital investment if companies are forced to operate under these types of rules.”
According to reports, Zimbabwe state media on Wednesday announced that miners would no longer be allowed to export raw platinum if a refinery was not built by December.
Zimbabwe is the world’s second largest platinum supplier, but mining companies tend to send its raw ore form to neighboring South Africa for processing.
Mining authorities also plan to introduce a 15 per cent levy on unprocessed metal exports.
Zimbabwe is a prospective exploration country for precious group metals but Nell explained that due to the current underlying environment, investment opportunities have become uncertain and in some instances unfriendly.
“In the past we’ve seen many cases that threats have been made and demands have been put on the table, but it’s got to be something that can work for both parties to make it viable.”
South African mining company Impala Platinum (Implats) and Anglo American Platinum are among the firms that could be severely affected by the ban if implemented.
Implats also owns 87 per cent of Zimbabwean Platinum producer, Zimplats. The mine owns a base metal refinery but it is non-operational as it is expensive to run, especially on outdated technology.
[DATA IMP:Implats] have been particularly hit hard by the significant labour unrest in South Africa, but Nell sees strong chances of a comeback.
“We like Impala. [Its Rustenburg mine has] gone through a very tough period and I think it’s in the process of recovering, and with that, one can certainly expect better returns,” said Nell.
“Royal Bafokeng Platinum’s also operated in a very difficult environment. We still prefer the platinum or the precious group metal producers over the gold producers at this stage. For a patient investor, there could be something in it.”