Zimbabwe's Zimplats assures investors on mine

JOHANNESBURG (Reuters) - Zimplats Holdings Ltd said on Friday it was operating satisfactorily in Zimbabwe despite the country's political crisis, but that it had to rely on imports as the local supply network had broken down.

Zimplats, majority-owned by South Africa's Impala Platinum (Implats), said in a statement on its website, that it had experienced "limited political activities at its operations", but that these had not affected the firm's output.

Zimplats did not elaborate on the political activities, and could not be reached for comment.

"Zimplats operations and the expansion project at Ngezi, Zimbabwe are operating satisfactorily," the firm said in a statement. The firm has open-cast and underground operations, located south-west of Harare.

"Zimplats has recently experienced limited political activities at its operations. These activities however, have not impacted on the safety of personnel nor have had a material effect on company operations."

Zimbabwe, which has the second-largest platinum reserves after the world's top producer South Africa, is mired in a political crisis over a presidential run-off on Friday.

President Robert Mugabe went ahead with the election even after opposition leader Morgan Tsvangirai withdrew, saying violence by Mugabe's supporters meant it could not be fair, and despite widespread international condemnation.

Zimplats said that in the short to medium term, its major challenges were retention of skills, reliable power supplies and the rebuilding of the local supplier network.

"This latter issue is a direct result of the shrinkage of the economy and has created a situation where Zimplats has no option but to import practically all of its goods and services," the company said.

Zimplats is expanding its operations to 160,000 ounces annually, from the current output of 91,000 ounces a year. The firm has a long-term output target of 1 million ounces.

Implats, the world's No. 2 platinum producer, has said its operations in Zimbabwe were going on well despite the crisis.

Apart from its stake in Zimplats, Implats has a joint venture with Aquarius Platinum Ltd in Zimbabwe's 69,000 ounce a year Mimosa platinum mine.

Implats is the foreign mining firm with the biggest investment in Zimbabwe, which has the second-largest platinum reserves after the world's top producer South Africa.

Anglo American Plc has said it was reviewing options on the development of its Unki platinum project in Zimbabwe, in response to a UK newspaper article saying politicians and investors had condemned Anglo for investing in Zimbabwe.

Rio Tinto also owns a diamond mine in Zimbabwe.

(Reporting by James Macharia)