LONDON, July 4 (Reuters) – South Africa-focused miner
Aquarius Platinum, the world’s fourth largest platinum
producer, said it planned to limit mining activities to
concentrate on conserving cash and guarding its reserves until
economic circumstances changed.
The platinum sector in South Africa, home to around 80
percent of known platinum reserves, is battling the impact of
falling prices, weak demand, soaring costs and a government
safety drive that has cut production as operations are suspended
for safety violations.
“We seem to be one of the few companies in the platinum
industry that is willing pro-actively to take the required tough
decisions to close the mines,” Aquarius chief executive Stuart
Murray said, referring to the three mines where the company has
halted operations.
“I would hope that the other industry players follow suit
and cut the unneeded production that is depressing the
industry.”
Aquarius said on Wednesday that it would suspend all
non-essential capital expenditure and focus on its Kroondal,
Mimosa and tailings operations to maximise cash flow generation.
The company said it expected the price of platinum, a
precious metal used to make catalytic converters in cars, to
remain stagnant while operating costs continued to rise.
“In this environment, the only defensible strategy is to cut
all non-essential capital expenditure, and place all
non-contributing assets on care and maintenance while optimising
profitable operations for maximum contribution in the current
low price environment,” Aquarius said.
Anglo American Platinum, a unit of global miner
Anglo American warned on Monday that its first-half
earnings would fall more than 20 percent due to lower sales and
falling prices.
Shares in Aquarius, which have crashed 66 percent in the
last three months, closed at 51 pence on Tuesday, valuing the
company at 226.3 million pounds ($355 million).
