HomeNewsEastplats suspends funding for two projects

Eastplats suspends funding for two projects

Early construction
at Eastplats’ Kennedys
Vale project
Vancouver, Canada — 1 June 2012 – Because of continuing negative changes in the global economic environment and the operating environment in South Africa, Canadian-based and listed Eastern Platinum Limited has decided to suspend funding for the ongoing development of its Mareesburg open pit mine, and for the construction of the Kennedy’s Vale concentrator plant in South Africa.

In a statement issued here, the company said it would reassess the project economics as and when a sustained recovery in the global economic environment and metals prices took place.

It added that the project was progressing according to the planned schedule and budget with initial commissioning planned for the first quarter of 2013.  Civil works were largely complete and concrete work was well advanced. Almost all the necessary process equipment had been procured and received. Engineering was over 90% complete with construction about 20% complete. The overall project was 30% complete and a rapid restart of project construction could take place when conditions warrant.  

With the ongoing weakness and volatility in the global financial markets (particularly in Europe which consumes approximately 50% of South Africa’s platinum production), the company said it was of the view that a near-term recovery in PGM prices to sustainably appropriate levels was unlikely.

In addition, the South African PGM industry was dealing with a number of other predominating economic factors, including unrelenting operating cost inflation, adverse currency exchange rates, weak chrome prices, heightened concerns with respect to reliable power delivery, and unplanned and unlawful labour actions.
In the current operating environment, the financial risk of continued project development is not merited, and Eastplats has taken the decision to suspend the project funding so as to maintain the value in the resources planned to be mined,” the statement continued. “The rroject will be monitored subject to a sustainable strengthening of metal prices and improvement in operating conditions in South Africa.”

Source: Eastern Platinum Limited. For more information, click here.