Mimosa Mining could cancel expansion plans at platinum mine in Zimbabwe

9 February 2015 (Last Updated February 9th, 2015 18:30)

Zimbabwe-based Mimosa Mining may drop its platinum mine expansion plans if the country places a levy on exports of unprocessed metal.

Zimbabwe-based Mimosa Mining may drop its platinum mine expansion plans if the country places a levy on exports of unprocessed metal.

Mimosa Mining is a venture between Aquarius Platinum and Impala Platinum.

In January, the company requested the government to clarify the 15% levy proposal. Initially, the levy was proposed in 2013 in an attempt to boost the mining companies capacity to process platinum locally.

"The tax would be deferred until 2017 to allow sufficient time for mining firms to construct smelting and refining plants."

According to the treasury's annual budget statement in December, the tax would be deferred until 2017 to allow sufficient time for mining firms to construct smelting and refining plants.

In an internal document, Mimosa said it would put its mine into care and maintenance in order to carry out essential work and restart as soon as possible.

This year, the company is set to invest $70m in the expansion its mine to raise the annual output of platinum group metals from the current 220,000oz to 70,000oz.

If the expansion plans are abandoned, shareholders may lose $183m in potential revenue over three years, Bloomberg reported citing Mimosa Mining's document.

Mimosa open pit mine is located in the northern part of Zimbabwe and has estimated reserves of 7.9 million ounces of platinum.

Last year, in an effort to raise country revenues and pay government workers, President Mugabe's administration imposed taxes on numerous commodities, from mines to water.