Eastplats consults staff over mine plan

EASTERN Platinum (Eastplats) is talking to workers who may be affected by plans to suspend mining at its Zandfontein mine at its Crocodile River operation and focus on development because of high costs, low metal prices and an uncertain outlook for the platinum market.

The decision follows just weeks after suspending work at its Mareesburg mine and Kennedy’s Vale mill and concentrator near Steelpoort in Limpopo because of poor market conditions.

Eastplats, which is listed in Toronto and Johannesburg, yesterday said it made the decision to focus on development work, rather than stoping at its Zandfontein mine near Brits, to reduce costs. Zandfontein and Maroelabult make up the two operating assets at the Crocodile River Mine, which had been ramping up production to reach 160 000 tons of ore a month by 2014.

Zandfontein was to supply 120 000 tons.

Eastplats, which is headed by Ian Rozier, produced 92 724 ounces of platinum group metals (PGMs) last year, and in March had cash of $78m.

Maroelabult has a life extending to 2016 and Zandfontein has a life topping 20 years.

The development will be on the reef, which means the mine will continue producing platinum. Eastplats will update the market in a month on its production targets for this year and next.

Eastplats said it had terminated a $100m loan facility with UniCredit Bank and Standard Bank that would have been used for the Mareesburg and Kennedy’s Vale projects to add 100 000 ounces a year of PGMs.

“The company and the banks have agreed to investigate the restructuring of the financing package when the project is restarted,” Eastplats said.

Eastplats holds 87,5% of Crocodile River. It spent $2m during the first quarter of the year on underground development and the vertical shaft at Zandfontein.

It suspended work at the Crocette section of the Crocodile River mine earlier this year because of poor market conditions.