UPDATE 2-Zimbabwe mining industry broadly backs new platinum refinery plan

(adds mines minister)

By Wendell Roelf

CAPE TOWN, Feb 3 (Reuters) - Zimbabwe's mining industry broadly supports a government proposal to build a new platinum refinery by 2016 as part of efforts to make the mining sector a key driver of growth, a senior industry official said on Monday.

Platinum producers last month met a state deadline by President Robert Mugabe's government to submit proposals to build the precious metal refinery within two years or risk a ban on raw exports of the metal. News Search ID:nL5N0KT0TY

"We are at one with the government on this issue ... it is the how and the means that differ," Alex Mhembere, president of the Zimbabwe Chamber of Mines, said on the sidelines of an African mining conference in Cape Town.

Mhembere, also chief executive of Impala Platinum unit Zimplats ZIM.AX IMPJ.J , said the industry was nearing the 500,000 ounces of annual output needed to make such a refinery viable.

Output from the southern African nation, which holds the world's second largest reserves of platinum after South Africa, has risen to an all-time production record of 430,000 ounces in 2013, up from 340,000 the previous year.

The world's two largest platinum producers, Anglo American Platinum and Impala Platinum Holdings, both have operations in Zimbabwe.

Mines and mining development minister Walter Chidhakwa said the estimated cost of the refinery and associated 600-megawatt power plant was $3.2 billion.

"If a company got interested we would also look at giving them a coal field that has got the ability to generate 600 megawatts, while the platinum project will take about 200 to 300 megawatts," Chidhakwa said.

Besides the refinery, Zimbabwe has targeted a coal bed methane project and a precious minerals centre to cut and polish diamonds as it seeks to boost an economy expected to grow 4.2 percent in 2014.

As part of the mining sector's regulatory overhaul, the government was looking at royalty and mining taxes, but did not want to scare off investors already wary of policies aimed at handing over majority stakes in foreign companies to locals, Chidhakwa said.

Zimbabwe was on track to present the principles of its revised Mines and Minerals Act and Precious Stones Act to cabinet, in the first quarter of this year, prior to tabling it in parliament.

(Additional reporting by MacDonald Dzirutwe in Harare, editing by David Evans)

((wendell.roelf@thomsonreuters.com)(+27 82 893 6088))

Keywords: ZIMBABWE REFINERY/