Northam Platinum's earnings dropped by 65 percent for the six months ending December 2010, the JSE-listed platinum company said on Monday.

"The story of H1 [the first half of the company's financial year] is largely about a disappointing operational result at Zondereinde," said Northam chief executive Glyn Lewis in a statement.

The company had difficulty accessing available reserves at the mine, which is based on the western limb of the Bushveld Complex in Limpopo.

"This was further aggravated by the protracted strike, the slow start-up post the strike, and safety stoppages, resulting in a loss of 31 percent of available production time."

Workers went on a six week strike last year.

The company's start-up mine Booysendal, on the eastern limb of the Bushveld Complex, had shown "solid progress", Lewis said.

"... all mining licences having been received and executed, any project risk associated with regulatory permitting is now significantly reduced."

The mine would also receive a cash injection of R650 million through the unbundling by Mvelaphanda Resources of its holding.

Lewis said the problems associated with mining the Merenksy reef at Zondereinde were unlikely to abate in the short term.

"The turnaround should start manifesting, albeit slowly, during the next financial year, as we establish additional stoping areas in the upper and central western portions of the mine and as the decline development starts contributing to production."

He warned it would be another 18 months before Zondereinde was "out of the woods"

Booysendal was moving into the "crucial construction phase" with the appointment of a mining contractor finalised.

Bulk earthworks for the on-site concentrator and other mine infrastructure had started.

The company expected production to fall significantly for the full financial year.

"In the medium term though, as Zondereinde starts recovering from its operational difficulties, Northam should be well positioned to take advantage of the continuing improvement in global economic conditions."

Long-term, the company expected the opportunity presented by Booysendal to add geographic diversification, which would reduce the risk of relying on one mining asset.