Aquarius Platinum shares plunge

Brendan Ryan | Mon, 19 Jul 2010 10:42

[miningmx.com] -- AQUARIUS Platinum (Aquarius) shares plunged up to 25% in early trading on the Johannesburg Stock Exchange on Monday on production fears over revised mining requirements.

The shares fell from R32 to R25.25 before recovering to around R27 after a directive was slapped on Aquarius by the inspector of mines for the North West region.

The directive demanded radical changes be made to the system of bord and pillar mining used by the company’s Marikana and Kroondal mines.

This follows the deaths of five mineworkers in a rockfall incident at the Marikana mine on July 7 and a meeting between Minister of Mineral Resources Susan Shabangu and 15 platinum company CEOs regarding safety on July 15.

The directive to reduce bord widths to six metres was slapped on Aquarius on Friday afternoon just hours after chief inspector of mines Thabo Gazi had denied to Miningmx that such a step was to be taken.

The measure could have a serious impact on production from the two affected Aquarius mines.

According to JP Morgan Cazenove analyst Steve Shepherd Aquarius is the most exposed to the negative impact of the directive because it sources about 85% of its South African production from bord and pillar mining operations.

A statement from Aquarius released on Monday commented the directive would not “give rise to a safer mining environment in respect of fall of ground accidents.

“Furthermore, Aquarius believes that the directive will have a detrimental economic effect on those Bushveld chromite and platinum mines that use the bord and pillar mining method.”

Aquarius said it would formally appeal against implementation of the directive on Monday afternoon and would present alternative strategies to ensure safer and sustainable bord and pillar operations.

Aquarius said it had retained an international mining consultant who agreed with the company’s assessment of the directive and had also started a “pro-active approach to finding the optimal solution for a safer working environment”.

The company added, “within this process, Aquarius has extended an invitation to other Bushveld mining companies and other key stakeholderswho might be affected by the directive so that they may participate in the process.”

The writer owns shares in Aquarius Platinum.