Platinum industry attacked from many angles: Aquarius Platinum CEO
Aquarius Platinum CEO, Stuart Murray, announced frustration with the platinum industry due to strikes, regulatory hurdles and PGM oversupply.
Murray laid out a litany of complaints in the company’s 2Q production results that were released on Tuesday.
Aquarius Platinum’s attributable production for the second quarter decreased by four percent quarter-on-quarter to 105,629 PGM ounces.
Average PGM dollar prices deteriorated in the quarter. Platinum and palladium fell 14% and 17% respectively while rhodium fell 16%.
“The December quarter of 2011 was a most challenging one, both for AQPSA and, it seems, the entire platinum industry, which continues to be attacked from many angles,” said Murray.
Murray was critical of the many safety stoppages the company was forced to abide by.
“This issue is making the South African mining industry a difficult place in which to operate and whilst zero-harm is laudable, there must be practical implementation of the law. Not only has the incidence of these stoppages risen markedly, in many cases the time now taken by the regional department to resolve these stoppages has risen from some 2 days to a week or sometimes more.”
Aquarius Platinum also lost two weeks production at its Everest Mine due to a contractor’s strike.
“The mine is now also under an optimisation study as a result of near-term poor ground conditions, lower prices and the significant delays in permitting the open-cast reserves.”
Murray also found many external factors that are weighing negatively on the business.
“The challenges facing the region’s platinum industry at present should not be underestimated. PGM margins are now low in both Rand and Dollar terms, and oversupply (relative to real consumption) coupled with a poor economic outlook is likely to ensure that this remains the case, at least in the short term. Cost and regulatory pressures also continue unabated.”
Aquarius Platinum closed down 4.85% to $170.50 a share.