Leon Coetzer. Picture: FINANCIAL MAIL
Leon Coetzer. Picture: FINANCIAL MAIL

Jubilee Metals has not shut its new Zambian base metals refinery as its platinum group metals (PGMs) and chrome operations moneyspinners in SA enter a three-week lockdown.

In SA, the government has ordered the 21-day lockdown to slow the spread of the Covid-19 virus, bringing mining, industry and business to an abrupt halt. However, companies with smelters and metal refineries can continue operating those plants during this period to prevent damaging the furnaces, mineral resources & energy minister Gwede Mantashe said on Wednesday ahead of Friday’s start to the stoppage.

Jubilee has prepared its SA operations in PGMs and chrome for the lockdown. “The measures that have implemented by the group are focused on preserving the company’s liquidity and ensuring that we are able to rapidly restart operations following the enforced stoppage,” said chairman Colin Bird.

“At the time of writing this statement, our operations in Zambia remain unaffected by the Covid-19 virus,” he said.

Jubilee, which is listed in London and Johannesburg, posted a near ninefold increase in profit for the interim period as its output of PGMs grew exponentially and the company added base metals to its asset suite to spur future revenue growth and diversity.

Jubilee has gained a more secure footing in SA as its chrome and PGM businesses consolidated and grew during the six months to end-December, allowing it to add a Zambian metal refinery business to the portfolio.

Post-tax profit for the six months grew to £6.6m (about R115m) from £762,000 the year before reflecting the increase in revenue growth to £25m (R439m) from £8m.

“Despite volatile metal prices, including in particular the volatility we have seen in chrome prices, our diversity across commodities has meant we have delivered record earnings on the back of increased production,” said CEO Leon Coetzer.

Jubilee paid £17.7m cash to add assets to the business, the biggest being the Sable refinery in Kabwe, Zambia, where its first copper was produced in December and zinc output should start soon in 2020. It raised £6.5m from shareholders towards these purchases.

“The Sable Zinc Refinery has further enhanced the company’s operational earnings capability, expanding Jubilee’s operations to other geographical areas and metals. These strategic investments are quickly translating group investments into cash generation,” Coetzer said.

PGMs output shot up by 72% to more than 21,000oz, generating a doubling in revenue to R281m.

Jubilee has a joint venture with Northam Platinum to process PGM material through the Eland concentrator as the latter company prepares to return the mothballed Eland mine to production.

Chrome revenue grew by eight times to R158m on higher chrome production.

seccombea@businesslive.co.za