Platinum Aus. to resume mining next week

[] — PLATINUM Australia, which runs the Smokey Hills mine in South Africa, expects to resume underground operations from Monday after an unprotected strike led to the majority of a contractor’s workers to be fired.

The strike has led to a stoppage of almost all operations, the company said, causing its shares to fall five percent to A$0.95 on Wednesday.

The contractor, Redpath Mining SA told ASX- and AIM-listed Platinum Australia most of the workers had been dismissed but they could appeal against their firing by the end of the week to be considered for re-employment. Around 80% or 400 workers have already done so and the remainder are expected to do so by the end of the week.

“The contractor expects underground mining operations to recommence on Monday 8th March, with a full compliment available on both shifts,’ Platinum Australia said in a statement.

“The ramp up to normal operations at Smokey Hills is expected to require a further two days following the recommencement of underground mining,’ it said.

It’s not immediately clear what the impact on production will be, but a lightning strike, which shut down the milling and flotation sections of the Smokey Hills plant for three or four days results in a loss of some 1,000 oz of four platinum group metals, namely platinum, palladium, rhodium and gold.

Smokey Hills has both opencast and underground mining, with the latter starting in September 2008 and expected to reach steady state output in March this year. Smokey Hills is forecast to have production of 55,000 oz of production in 2009/10 and production of 95,000 oz of PGMs in the 2010/11 financial year.