Stuart Murray, CEO, Aquarius Platinum
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Aquarius Pt styled SA’s “King Rat”
Brendan Ryan
Posted: Thu, 08 Sep 2005

[miningmx.com] -- AQUARIUS Platinum CEO, Stuart Murray, described his company as the “King Rat” of South Africa’s platinum sector which is the focus of attention at this year’s Africa Downunder conference.

Outlining the structure of the South African platinum industry, Murray said: “There are three gorillas in this cage – Anglo Platinum, Impala Platinum and Lonmin – and then there are a whole bunch of rats and mice scurrying around”.

“I like to think that Aquarius has by now achieved the status of King Rat,” he said. But Murray’s presentation subsequently made it clear there is more to this assessment than a dry sense of humour.

He is anticipating a period of consolidation in the South African platinum sector in which Aquarius expects to pick up more business through teaming up with various of the “rats and mice.”

Murray stated: “The way forward is through consolidation but I am not at liberty to discuss specifics.”

He is particularly downbeat on the prospects for those platinum juniors looking at developing prospects on the Platreef where Anglo Platinum operates the opencast Potgietersrust Platinum mine.

The grade of the Platreef deposits is significantly lower than the grade found on the Western and Eastern Limbs of the Bushveld. In addition, the highest grade section of the Platreef is already owned by Anglo Platinum.
The way forward is through consolidation
According to Murray, any platinum junior starting operations on the Platreef is going to face a challenge of getting its concentrates smelted by one of the three existing major platinum companies. This is because available spare capacity in the existing smelters is rapidly being taken up.

The smelters will also not want to commit their capacity to treating low grade concentrates from Platreef mines which also carry quantities of iron and sulphur which must be removed.

Murray said the smelters would give priority to processing high-grade concentrates produced by companies mining the higher-grade Merensky and UG2 reefs.

Aquarius has built its business on a strategy of producing concentrates which are then smelted and refined through agreements with both Impala Platinum and Anglo Platinum.

That approach has reduced both the technical risk and capital costs associated with the three mines that Aquarius has built so far at Kroondal, Marikana and Everest.

Said Murray: “Any junior opening up a mine on the Platreef is probably going to have to build its own smelter. South Africa’s new environmental legislation is far stricter on emission levels than in the past which means any smelter will have to include either a sulphuric acid manufacturing plant or a sulphur emissions abatement plant.

“You are looking at an investment of several billion rand to be added on top of the cost of the mine and concentrator,” Murray said.