[miningmx.com] — AQUARIUS Platinum (Aquarius) is the latest platinum miner to report production drops during the March quarter as a result of safety interventions at its mines by the department of mineral resources (DMR).
Other groups to report production drops because of DMR action in recent weeks include Anglo Platinum (AngloPlat) and Eastern Platinum (Eastplat).
According to Aquarius CEO Stuart Murray, “this past quarter saw rather high absenteeism following the (holiday) breaks but has also been further affected by a marked increase in so-called section 54 stoppages across the industry in South Africa.
“Aquarius’ South African operations were not immune to this reality and production was somewhat impacted.’
Aquarius’ total March quarter production dropped 6% to 216,686 ounces (December 2010 quarter – 230,014oz) but production from its two main SA mines – Kroondal and Marikana – fell by 20% and 27% respectively.
Production from the Everest mine in Mpumalanga rose 10%, while output from the Mimosa mine in Zimbabwe was 9% higher.
The Kroondal and Marikana mines are situated near Rustenburg on the western limb of the platinum-bearing Bushveld Igneous Complex.
The DMR sought to impose draconian new safety measures in July last year on all mines operating in this area using mechanised mining methods, following a fall of ground at the Marikana mine which killed five mineworkers.
The main step demanded by the DMR was that “bord widths’ – the width of the section of reef being mined – be immediately reduced to 6m at all mines, irrespective of differences in geological conditions between the mines.
That provoked a 25% drop in the Aquarius share price at the time, after the company cautioned shareholders it would have to cease mining operations temporarily to comply.
After negotiations with Aquarius and other affected platinum companies, the DMR backed off and withdrew the demand, citing a “misunderstanding’.
Aquarius subsequently implemented a string of changes to its mining methods with the approval of the DMR, following a series of in-depth technical studies.
But it appears the DMR has continued to focus its attention on mines operating in this region, in what JP Morgan Cazenove analysts Steve Shepherd and Allan Cooke have described as a “substantial safety crack-down across the region by the DMR, following higher accident rates in recent months’.
AngloPlat CEO Neville Nicolau reported: “We experienced more safety stoppages in the first quarter of 2011 than during the whole of last year.
“The very high number of safety stoppages led to regular breaks in production momentum. As a result, we completely reviewed all safety-related issues.
“In the process we engaged with our colleagues from labour unions and the DMR as we remain committed to, and supportive of, all safety improvement initiatives.
“By the end of the quarter the extraordinary safety stoppages had come to an end and we have been striving to ensure the continued implementation of the safety-improvement initiatives we have been working on for the past three years.’
Four mineworkers died on AngloPlat mines during the March quarter.
Eastplat shares have taken a pounding, dropping from levels just below R10 a share prior to the release of its March quarterly numbers on April 18 to 814c currently.
Eastplat’s production fell 22.5% to 25,387oz (32,752oz) because of what CEO Ian Rozier called “the traditional slow start in January, combined with the introduction of revised support methods’.
Rozier did not specifically cite “section 54” stoppages, but said a comprehensive internal safety review had been carried out in line with the new DMR general safety recommendations on roof support requirements.
