AQUARIUS Platinum says the suspension of two mines has left it capable of weathering the drop in platinum prices and demand.
Aquarius has in recent weeks suspended its wholly owned Everest mine and the Marikana mine it shares with Anglo American Platinum (Amplats) because of weak market conditions and operational problems. This has left it the Kroondal mine in SA and the Mimosa operation in Zimbabwe.
Amplats said yesterday it was in talks with Aquarius about Kroondal. Amplats would not tolerate loss-making operations in an oversupplied market, acting CEO Bongani Nqwababa said yesterday.
However, Aquarius feels the operations it has left open will suffice. "We are confident that the new operational configuration of Aquarius Platinum SA will enable the company to withstand the continuing downturn," CEO Stuart Murray said yesterday.
"We expect that production from Kroondal will continue to improve, complemented as always by robust production from Mimosa and the modest margin contribution from out tailings operations," he said.
Kroondal generated a total of 82212oz of platinum group metals (PGMs) in the quarter to end-June. Half was attributable to Aquarius. The mine posted a negative cash margin of 24%.
Mimosa, which is shared with Impala Platinum, produced a total of 54588oz of PGMs and had a positive cash margin of 51%.
"The numbers are my friend. If the numbers clearly indicate that we are making losses and our debt is increasing, there would be no reason to keep the operation open," Mr Nqwababa said.
Cash reserves in Aquarius of $180m were "sufficient" for it to continue operating its mines over the next year, Mr Murray said.
Aquarius has made a bid to buy the southern portion of the Booysendal property contiguous to the Everest mine from Northam.