[miningmx] — EASTERN Platinum (Eastplats) has suspended the development of its
Crocodile River Mine (CRM), citing the continuing negative outlook for the global
economy, sustained weak platinum group metals prices and difficult operating
conditions in South Africa.
“The company will continue to reassess the viability of production at CRM and
reinitiate funding for production once conditions support such a decision,’ it said in a
statement on Sunday.
Eastplats said the decision to suspend funding for CRM was influenced by both macro
and micro-economic issues.
“The 2008 financial meltdown and its impact on European car sales resulted in a
reduction in platinum demand and this shows no signs of a near term recovery; year-
on-year European car sales have declined every single month since October 2011.’
It also said the costs per tonne milled at CRM have risen by 82% since the beginning
of 2007, while the PGM basket price has fallen by 17% in rand terms over the same
period. Concurrent to this was the ongoing labour-related work stoppages which has
negatively affected productivity.
“When taken together, the impact of a stagnant commodity market, the rising costs
of mining and decreasing productivity have resulted in it becoming increasingly
difficult to justify the continued level of funding required for the CRM development
plan,’ Eastplats said.
CEO and President, Ian Rozier, said the industry would have to contend with much
lower metal prices than previously projected in the short and medium term.
“After a considerable amount of review and evaluation Eastplats sees no merit in
depleting the financial resources of the company in this economic and operating
environment.’ Rozier said.