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Production: Zimplats produced 94 300oz of platinum-in-matte and 200 200oz of PGMs-in-matte declines of 2.3% and 2.7% respectively. Despite the problematic operating environment, Zimplats increased mill throughput and continued with the phase one expansion project, which remains mostly on schedule and within budget.

Tonnes mined increased by 1% to 2.4Mt. A surface stockpile of 460 000t was built ahead of the Phase 1 concentrator expansion. Grade mined fell to 3.53g/t (5PGE+Au) as a result of the mining of a lower grade area at the opencast operation (FY2007: 3.70g/t).

Although delayed, the start of production from portal 1 helped to offset reduced output from portal 2, the original underground trial mine, which experienced problems with equipment availability and power outages. In May 2008, a second fleet of LHDs was commissioned at portal 1 where full production is scheduled for June 2009. Development at portal 4 continues with drilling of the first raise bore hole having commenced.

While the improved performance of the pebble crusher enabled higher mill throughput with tonnes milled up 3.2% to 2.20Mt, the lower grade contributed to reduced metallurgical recoveries of 82.8% (FY2007: 84.4%). Civil work to expand the ore silo and crushing station at the new concentrator is under way. The new concentrator is on schedule with cold commissioning planned for November 2008 and hot commissioning for February 2009. On completion, Zimplats will have total concentrator capacity of 4.1Mt, equivalent to 180 000oz of platinum annually.

The smelter, which was successfully refurbished during the year, will operate at full capacity of 180 000oz of platinum annually on completion of the phase one expansion programme in FY2011. Construction of housing, which is part of this programme, is currently behind schedule due to a lack of skills and a shortage of inputs.

Given the delays in the development of portals 1 and 4, and the increase in plant capacity to 2Mt annually (increase of 500 000t), following the modifications already undertaken, the opencast mining contract is being reviewed with a view to extending the period. The extra tonnes mined will be stockpiled to supply the concentrator, enabling it to run at annual design capacity of 2Mt from May 2009, when production at portal 4 begins ramping up. The stockpile will be maintained until around July/August 2009. Operations are expected to normalise in FY2011, once portal 4 reaches full production.

A long-term power supply contract, denominated in US dollars, has been secured with Cahora Bassa in Mozambique.

Costs: Costs per tonne milled rose to $54/t, up 22.7% in dollar terms. The cost per platinum ounce in matte was 29.5% higher at $1 269/oz. These increases were driven largely by escalations in the prices of power, steel and fuel, which were in turn compounded by an unrealistic exchange rate and higher labour costs, as salaries and wages were increased in order to retain critical staff. Unit cost increases were also aggravated by the lower grade and reduced production and an ever increasing proportion of goods which have to be imported.

Capital: Capital expenditure totalled $182 million. Of this, almost three-quarters was spent on the phase one expansion with replacement capital, funding for the power supply sub-station currently under construction and exploratory drilling, accounting for the balance. Capital expenditure of $191 million is planned for FY2009, mostly on the continued development of portals 1 and 4 and the concentrator expansion ($115 million); and replacement expenditure ($31 million) that includes the replacement of underground equipment and the rehabilitation of the road between Ngezi and SMC.

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