Pressure on platinum prices halts mining activity

13 June 2012

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13 June 2012 | Kamalpreet Badasha

Aquarius Platinum is to suspend operations at its Marikana platinum mine in South Africa due to tough trading conditions.

The suspension is due to trading conditions in the platinum market being “difficult in the short-to-medium term,” the company said in a statement on its website. Over the past year the price of platinum has dropped by more than $250 (£160) per ounce. Aquarius said the Marikana site was “uneconomic”, but that when market conditions improve mining will recommence. At present the ore is being retained for the future.

The Marikana mine produces around 60,000 to 80,000 ounces of platinum per year, out of a global total of around 5.5 million ounces.

In a similar move in May, Eastern Platinum suspended funding of its Mareesburg open pit mine which was due to open in 2013 because of lower prices and a poor economic outlook.

South Africa and Zimbabwe are the primary producers of platinum, which is used in catalytic converters in cars to prevent the emission of harmful substances. Platinum is also used in electric cars, the petroleum industry and hard drives.

The price of platinum has fallen from around $1,853 (£1,192) per ounce in April 2011 to approximately $1,589.26 (£1022.34) per ounce in April 2012.

Management at Marikana will be moved to the Kroondal site following an agreement with Anglo American Platinum.

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