CORRECT: Aquarius Platinum To Halt S Africa's Marikana Mine Due To Weak Price Outlook
11 June 2012 - 8:57PM
Dow Jones News
Aquarius Platinum Ltd. (AQP.LN) said Monday it will halt its
Marikana mine in South Africa due to low prices for the metal, a
move analysts said could be the start of wider production cuts
across the industry currently struggling with rising costs and weak
demand.
"Trading conditions in the platinum industry are expected to
remain difficult in the short-to-medium term and these conditions
have rendered the operations at [Marikana] uneconomic," Aquarius
said in a statement.
Marikana accounted for 11% of Aquarius' platinum output in 2011
and is run jointly with Anglo American Platinum Ltd. (AMS.JO).
The process to place the mine and concentrator on care and
maintenance follows a decision by Anglo American PLC (AAL.LN)
earlier in the year to review its platinum operations, which it
said could include closing some mines.
And in May, Lonmin PLC (LMI.LN), the world's third largest
primary platinum producer, warned there was a risk production plans
in the industry could change, given "an unrelenting depressed
pricing environment."
Platinum prices on the spot market are trading down around 17%
from the 2012 high hit in February. Costs are up in South Africa,
the world's largest platinum producer, while demand for the metal,
which is largely used in cars to clean exhaust, is weak.
"We believe we may finally be close to witnessing industry-wide
supply discipline and production cuts," said Dominic O'Kane, an
analyst at Liberum Capital.
Marikana produced 52,962 troy ounces in its 2011 financial
year.
-By Devon Maylie, Dow Jones Newswires; +27117837848;
devon.maylie@dowjones.com (Francesca Freeman in London contributed
to this report.)
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