Saturday, June 30, 2012

Aquarius Platinum puts Everest South mine on care and maintenance


Original source

AQUARIUS Platinum’s woes deepened on Thursday when it suspended its Everest South mine in South Africa, leaving it just two operating mines and tailings treatment operations to generate revenue.

When Aquarius recently put its money-losing Marikana mine on care and maintenance, there was speculation that the Everest South mine, which has had operational difficulties and is also not making money, would be suspended too.

Shares in Aquarius fell nearly 9% to R7,25 on the JSE, making it the leading decliner, after it released the news of the suspension of Everest.

The South African platinum sector has sounded strong warnings this year that it is facing serious difficulties, with above-inflation wage and electricity increases, stagnant platinum prices and disruptions to mining operations due to government-led safety stoppages.

Anglo American Platinum, the world’s largest platinum producer, is reviewing its business to restore profit margins, and the result of that work will be made available towards the end of this year.

Eastern Platinum has suspended stoping, or dedicated reef mining, at its Crocodile River Mine near Brits and has opted to focus on development work, some of it on reef. It has also suspended a big expansion project near Steelpoort, Limpopo, because of the state of the market.

Aquarius said Everest would be placed on care and maintenance from June 21.

"The ramp-up at Everest has encountered challenges resulting from poor ground conditions and ongoing disruptive industrial relations over an extended period and these issues, coupled with the present low platinum group metals price environment, have rendered the mine uneconomic," Aquarius said.

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