Aquarius Platinum has seen a 7% rise in second-quarter output, despite the lower platinum prices, regulatory uncertainty in Zimbabwe and higher cash costs at its Kroondal mine in South Africa.
“The highlight of the second quarter was undoubtedly the continued increase in production and reduction in costs at Mimosa and specifically at Kroondal which is now consistently producing at levels higher than at any point in its 10 year life,” says Jean Nel, CEO Aquarius Platinum.
The improved cost performance partially offset the lower prices that prevailed during the quarter. At Mimosa production was stable and costs reduced further. Unfortunately, Mimosa does not benefit from a weakening currency and hence the lower Dollar metal prices impacted its margin directly.
Platinum Mile’s production for the quarter was at reduced levels following interruptions in its feed caused by industrial action at Anglo Platinum, but still managed a credible performance for the half year. Overall the company’s safety, production and cost performance continue d to improve and are at credible levels.
“The challenge is to maintain this credible performance whilst making incremental productivity and efficiency improvements, something we are absolutely committed to,” Nel said in a statement. “Our resolute focus on incremental improvements in safety, production and costs remains paramount with improvement programs in place across all operations.”
The quarter also saw a further decline in Dollar and Rand metal prices. “At the prices which prevailed during the quarter our business remains marginal, despite the cost reductions which we have successfully implemented. The decline in metal prices reversed after quarter end, albeit for the wrong reasons, as industrial action looms in South Africa and regulatory uncertainty continues in Zimbabwe,” Nel said.
“For as long as this increase prevails we will benefit from higher revenues and margin expansion provided production remains uninterrupted. The continued regulatory uncertainty in Zimbabwe is of particular concern to us as it impacts Mimosa’s ability to plan future production levels and capital allocation efficiently. Discussions with the Government of Zimbabwe continue and, seeing as we share the Government of Zimbabwe’s vision for a health y growing Zimbabwean platinum mining sector, we remain hopeful the matters could be agreed in due course.”