Weak metal prices have dragged Zimbabwe’s biggest platinum producer into a rare loss, reflecting the worsening pressure that miners are under.

The company reported on Tuesday that it increased output by 9% and boosted sales by 10% to 320 196 ounces in the six months to December. But this was not enough to offset the impact of a sharp fall in metal prices and rising costs.

Of the six platinum group minerals that Zimplats produces, the biggest price losses were in palladium which fell 42%, and rhodium, down 70%. As a result, revenue dropped 32% to US$372.8 million. Zimplats suffered a 94% dip in pre-tax profit, from US$221.5 million to US$14.2 million. The company swung to a post-tax loss of US$8.8 million from a profit of US$159.6 million, an unprecedented 105% dip in earnings.

“The operating environment characterised by softening metal prices has affected the financial performance in the period under review. In response, the company has instituted a number of survival strategies with stringent measures to contain costs and preserve cash,” Zimpats says. This is the first time in nearly a decade that Zimplats, one of the country’s most profitable enterprises, has posted a loss.

Zimplats’ parent company Implats announced last year that it would delay some of its projects due to falling metal prices and high costs. Zimplats is currently on a US$1.8 billion investment plan. This includes building a new mine, Mupani, and redeveloping another, Bimha. To process the increased output from the new mines, Zimplats is building a new smelter and working on a base metal refinery to process more platinum locally. The company has also started building a 185MW solar plant.

Zimbabwean miners expect profits to fall by 15% this year due to low metal prices. Last year, Tharisa announced it was postponing work on its new US$391 million Karo mine at Selous to wait out the price slump.

Showing the impact that lower profits for miners will have on the national purse, Zimplats’ income tax for the half-year fell to US$23 million from US$62 million. Zimbabwe depends on mining for the bulk of its foreign currency earnings. Lower metal prices mean the country will this year generate less forex, piling more pressure on the economy. Government is also using platinum earnings to service a US$400 million loan from Afreximbank.