Aquarius Reviews Everest Mine as Platinum Output Falls 17%

Aquarius Platinum Ltd. (AQP), the world’s fourth-largest producer, is reviewing its Everest mine in South Africa after a strike and safety stops curbed output and compounded the effect of lower metal prices.

A two-week strike at Everest cost 13 production days and Aquarius is reviewing its agreement with the contractor, the London-based company said in a statement today. “Near-term poor ground conditions” and delays in permitting the open-cast reserves added to the decision, it said.

Aquarius reported a 17 percent retreat in platinum group metals output to 105,629 ounces for the quarter ended Dec. 31 from a year earlier, including a 26 percent drop at Everest to 18,712 ounces. The company’s shares extended yesterday’s 6.7 percent decline, falling 4.9 percent to 171 pence at the close of trade in London.

Platinum fell 9.8 percent to an average $1,533 an ounce during the quarter from $1,700 a year earlier. Copper and other metals also declined as the outlook for global economic growth dimmed, damping prospects for demand for metals like platinum, used in car emission devices and jewelry.

Aquarius will limit production at Everest to 10,000 platinum group metals ounces a month for the next 12 to 18 months while the review is completed, the company said.

Second-quarter output missed the 120,000 ounce estimate of Credit Suisse Securities (Europe) Ltd., which said in a note today that an 87 percent cost increase at the Kroondal mine was a “big disappointment.”

To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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