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Zimbabwe’s platinum refinery deal – opportunities and questions

News came out on Wednesday that Zimbabwe signed a  deal with Australia’s Kelltech Ltd for the construction of a platinum refinery at a cost of $200 million.

This comes on the back of efforts to get platinum mining companies to build a refinery or face an export tax of 15 percent on raw platinum exports.

Personally, the deal came as a complete surprise, so I decided to do a bit of digging and here’s what I found:

  • The refinery that is being developed will use revolutionary technology, kell process, that has been over 18 years in the making.
  • Current platinum refinery/smelting – you get platinum concentrate, create a flotation concentrate, put it into a smelter, which uses 1 000 kilowatts per tonne of concentrate, then send it to a base metals refinery, and then to a platinum group metals (PGM) refinery.
  • Kell process reduces that extensive power consumption by dispensing with the smelting stage all together. The process, instead, uses leaching through two stages : The first stage is pressure oxidation, to leach out all the base metals. The second is a heat treatment, during which the platinum group metals (PGMs) leach out.
  • The lead developer of this technology is Keith Liddell who has previous worked for Aquarius and Mintek (South Africa’s national mineral research organisation)
  • The research and development process for this technology has been supported by mining group – Pallinghurst with investment of billions of rands from South Africa’s Industrial Development Corporation.
  • Kell process has not yet been commercially proven.

There are some interesting questions that come from this:

  1. This potentially revolutionary technology was largely developed in South Africa with SA government and private sector support. Yet what looks like the initial roll-out could be happening in Zimbabwe (granted Zim is a major major player in platinum). With the current investment climate?
  2. Are the current platinum players operating in Zimbabwe (Aquarius and Anglo) unaware of this technology? Obviously not. They know about this technology and have been keeping an eye on it. Given the cost of setting up a plant it is small wonder why this was not explored at the very beginning. Its proprietary but the least that could have been done is pointing towards this technology.
  3. Either way, this looks like a coup for the government of Zimbabwe. You get to commercially test potentially revolutionary platinum refining technology. Even if it does not work out – there are lessons to be drawn with respect to research and development. If it does work, look out for a potential removal of the export tax that has hung over the platinum industry like a hangman’s noose, and the institution of a government directive for all platinum concentrate to go through this new refinery if it is constructed according to schedule, a good 24 months or so away.
  4. A major concern is obviously the Zimbabwe Mining Development Corporation. Very little good has come out of anything that involves ZMDC.
  5. Ownership structure of the refinery has been set out as: ZMDC – 30 percent;  Kelltech – 49 percent and Golden Sparrow, a Zimbabwean firm fronted by labour lawyer, Caleb Mucheche with 21 percent.
  6. So, where will the refinery be located?

By Gilbert Makore- The Source

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