Aquarius Platinum will suspend operations at the Marikana mine it shares with Anglo American Platinum at the end of this month because of weak platinum prices and high costs, a move that could be the start of more closures in the embattled platinum sector.

This is the first closure of a platinum mine by a major mining group because of the poor state of the market and it follows shortly after Eastern Platinum suspended work on a new project near Steelpoort, Limpopo, because of the weak outlook for the market.

Amplats is reviewing its business to restore it to profitability and, while the group is tight-lipped about what it is considering, it is highly likely it could shut loss-making shafts and revisit joint ventures not making money.

Two sources told Business Day that Marikana, near Rustenburg in North West, issued a notice to its workforce last week to tell them of the pending closure of the operation, which will be put on care and maintenance until the market recovers.

"Aquarius told people at Marikana on Wednesday it was going to close the mine," a source said. Two shafts have already been closed, in March, because of the poor platinum price.

A second source confirmed the closure of the remaining shafts and the concentrator plant later this month, saying it was thought the high cost of the operation and the low platinum price were the key reasons.

"Something like this has been coming for a while now. We are seeing what the low platinum prices are doing to the miners and I think there’ll be more closures like this," the second source said.

Steve Shepherd and Allan Cooke, analysts at JP Morgan Cazenove, said in a recent note: "Platinum mining in SA has rarely, if ever, been more challenging for management and shareholders ."

Amplats said yesterday: "We have been advised that Aquarius, as the official managing partner, will be issuing a statement tomorrow (Monday) morning."

Article continues on page two...