BHP Abandons Hartley Platinum Project, Sells Stake to Zimplats for Nominal $3M

Strategic Insights -

BHP, the Australian resources group, has abandoned its Hartley platinum project in Zimbabwe and sold its 67% stake to its minority partner, Zimbabwe Platinum Mines (Zimplats), for a nominal $3 million. The sale follows BHP's decision to suspend operations at the loss-making Hartley mine, with the company agreeing to meet the costs of care and maintenance for up to 20 months. Zimplats, which is 51% owned by Delta Gold, plans to pursue discussions with third parties and the Zimbabwe government to maximize the value of platinum development in Zimbabwe.

Key Takeaways:

  • BHP has sold its 67% stake in the Hartley platinum project to Zimplats for a nominal $3 million, with operations at the mine suspended due to loss-making performance.
  • Zimplats plans to develop the $85 million Ngezi platinum mine, which will mill 2 million tons of ore annually from an opencast mine close to the Hartley property.
  • The feasibility study for the Ngezi mine is due to be completed by the end of the month, with construction expected to start early next year and production planned for 2001.
  • Zimplats hopes to cut its Ngezi investment virtually in half by using the state-of-the-art plant installed at Hartley to process platinum ore.
  • Zimplats may also process ore from the Mimosa platinum mine and the proposed Unki platinum project, which is being developed by Anglo American Corp.
  • Still at issue is whether the favourable fiscal regime extended to BHP will be made available to other platinum developers, such as Zimplats.
  • BHP has agreed to meet the costs of care and maintenance for up to 20 months, and Zimplats will pursue discussions with third parties and the Zimbabwe government "to maximise the value of platinum development in Zimbabwe for all affected parties".

Statistics:

  • BHP has sold its 67% stake in the Hartley platinum project for a nominal $3 million.
  • Zimplats plans to invest $85 million in the Ngezi platinum mine.
  • The Ngezi mine will mill 2 million tons of ore annually.
  • Zimplats plans to double throughput to 4 million tons a year with a second phase.
  • Production at the Ngezi mine is planned to begin in the first few months of 2001.

Sources:

  • Financial Times Limited (1999).