Johannesburg, South Africa — 24 July 2012 – Higher production from Kroondal mine helped maintain overall output at Aquarius Platinum in the June quarter, despite the decision to put the Marikana and Everest operations on care and maintenance.
But Miningmx reports that there was no masking the prospect that Kroondal was also in danger of closure as it recorded a negative 24% cash margin in the period.
It was a performance that was ominously overshadowed by comments from Aquarius’ 50% joint venture partner in the mine, Anglo American Platinum, which said Kroondal would fall under the gaze of its restructuring efforts.
Asked whether Amplats had a veto over any decision to shut Kroondal, Amplats interim CEO, Bongani Nqwababa, commented at the Amplats interim results presentation that if the numbers didn’t add up there was no reason to keep the mine open.
The numbers are not, in fact, stacking up. Kroondal raised production in the quarter 7% to 82,212 (non-attributable) ounces, but total revenue fell a fifth quarter-on- quarter to R605 million. On a per PGM oz basis, revenue averaged R9,160 against costs of R9,890 per PGM oz.
The outcome was that Kroondal’s cash margin had fallen from a positive 9% to minus-24% owing to poor platinum fundamentals.
Aquarius has announced plans to shift to an owner-operator model at its Kroondal mine, and there were plans in place to take over management of the mines from contractor Murray & Roberts by the end of 2012. “The owner-operator model will be rolled out at the other Aquarius mines as they are brought back into production,” the company said in its June-quarter announcement to the JSE.
Outside of its surface retreatment (chromite) activities, the only other operating Aquarius mine is its Zimbabwean asset, Mimosa Platinum Mines, which it owns with Impala Platinum. Thisd operation recorded an increase in cash margin to 50% from 30% previously.
Aquarius said it had enough cash – approximately US$180 million as of end-June – to keep its finance for its mines for the next 12 months.
It pointed out, however, that further disruption related to wage negotiations, which would be exacerbated by union rivalry, could be expected in the current quarter. Acts of intimidation among rival unions on members had been an industry-wide phenomenon recently. “Aquarius is by no means immune to this threat, and intermittent unlawful industrial action has occurred at one of Kroondal’s four shafts in July,” it said.
Nqwababa said that Amplats would engage with Aquarius and would make an announcement if there was “a common position”.
Source: Miningmx. For more information, click here.