Update: Aquarius suspends Marikana platinum mine after ground fall deaths

Mining suspended at Aquarius Platinum's flagship Marikana mine after death of 5 miners in accident. Company says too early to assess possible impact on production

LONDON (Reuters) - 

Aquarius Platinum, the world's No.4 primary platinum producer, suspended operations at a shaft of the Marikana operation in South Africa following the death of five miners, pushing its shares to an eight-month low.

Gavin Mackay, a spokesman for Aquarius, said it was too early to say what impact the accident may have on production. Shaft 4, where the deaths occurred, is responsible for about half of the production at Marikana.

"Whilst the direct impact on production is likely to be limited we expect an indirect impact from more frequent safety-related stoppages and are reducing our FY2011 production forecast by 1 percent and EBITDA by 2 percent," said Alison Turner, analyst at Panmure Gordon.

The accident is the second this month for Aquarius, although it is the first at Marikana, a 50:50 joint venture with Anglo American's Anglo Platinum unit, since the second half of 2008.

Shares in London-listed Aquarius Platinum were down 8.3 percent at 0918 GMT to the lowest level since November 2009 while AngloPlats, the world's leading primary platinum producer, was down 1.8 percent.

On July 1, Aquarius cut output targets by a fifth at its Blue Ridge mine due to a two-week suspension of operations and a safety review after two deaths.

"We expect this incident will likely result in an operational impact at Marikana, however it is too early to say on what scale, though we guess a 1-2 week closure could be expected in line with similar accidents elsewhere," said Liberum Capital on Wednesday.

Marikana produced 157,937 ounces of platinum group metals in FY2009 of which 78,969 ounces were attributable to Aquarius.

Operations at Marikana's open pit and Shaft 1 were unaffected and mining continued at the adjacent Kroondal mine, Mackay said.

The five miners at Marikana were killed after a fall of ground trapped seven workers, the National Union of Mineworkers (NUM) told Reuters on Wednesday.

One other worker is in a critical condition in hospital whilst the other was rescued unhurt, said NUM General Secretary Frans Baleni in a statement.

The miners worked for mining contractor Murray and Roberts Cementation.

An investigation into the cause of the accident will start on Wednesday.

(Additional reporting by Eric Onstad; editing by Lorraine Turner and Jon Loades-Carter)

© Thomson Reuters 2010 All rights reserved

SUBSCRIBE to Mineweb.com's free daily newsletter now.

SHARE THIS ARTICLE

Disclaimer

MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

Print story      Email story      Subscribe to free newsletter

Back