Anglo American Platinum (Amplats) (JSE:AMS) is planning a major expansion project at its Unki mine in Zimbabwe to triple production of platinum ore from 130,000 tons to 350,000 tons a month.
Under the proposed expansion project, which will last from 2016 to 2020, Anglo American Platinum will increase the number of sections it operates from 11 to 20 and its maximum depth from 1.5km to 1.8km. The life of the mine will be reduced from 80 years to 50 years.
"Studies are still in progress to determine the actual cost of the ramp-up phase," general mine manager Walter Nemasasi said last week.
"By the end of the year, we’ll know how much it would cost."
The expansion project comes amid growing concerns from the South African government on platinum producers to build a refinery in the country.
"Unki will continue its engagement strategy with the government in seeking to reach a mutual beneficial outcome regarding local beneficiation," Unki minerals marketing manager Caston Musa said.
In 2013, the Unki mine produced 63,000 ounces of platinum ore.
The expansion project is somewhat surprising as Anglo American Platinum has previously announced it intends on selling its assets in South Africa.
"That package has not yet moved," Nemasasi said. "Anglo American Platinum remains committed to complying with the legal requirements of indigenisation and, in its opinion, the heads of agreement remain valid."
The company is still owed $109 million from the South African government after it assumed the central bank’s $1.3 billion debt earlier this year.
The Unki mine is Anglo American’s last remaining mining operation in Zimbabwe.