Aquarius Platinum, the world’s fourth-largest primary producer, joined a chorus of warnings from the platinum industry that a South African drive to cut accidents was leading to lengthier and more damaging halts to production.
The South African platinum sector has been battered by oversupply, squeezed margins and an uncertain economic outlook, making producers increasingly vocal about regulatory pressures, particularly the impact of inspections and stoppages as part of the government’s zero-harm target.
Lonmin said last week the increased inspections actually increased risks as they interrupted momentum.
Aquarius, which announced a 17 percent year-on-year drop in output for the second quarter on Tuesday, said the stoppages had meant its key Kroondal operations did not operate at full capacity.
“This issue is making the South African mining industry a difficult place in which to operate, and whilst zero-harm is laudable, there must be practical implementation of the law,” Aquarius Chief Executive Stuart Murray said.
“Not only has the incidence of these stoppages risen markedly, in many cases the time now taken by the regional department to resolve these stoppages has risen from some 2 days to a week or sometimes more.”
Aquarius also operates in Zimbabwe, where it has the Mimosa 50-50 joint venture with Implats. It saw a 7 percent year-on-year rise in second-quarter production, though output dipped on the previous quarter, but the miner warned of increased regulatory impositions.
“All these relentless challenges make it clear that some of the stakeholders in both countries in which we operate simply do not grasp the fact that there are only 100 cents in the rand and 100 pennies in the dollar,” Murray said
“There is simply no more to be taken before the operations are threatened.”
It said it was in talks with the Chamber of Mines to ensure changes to mining fees being considered in Zimbabwe, including ground rental, licensing and export fees, are sustainable.
State media reported last week that registration fees could soar to discourage the holding of claims for speculative purposes.
Aquarius shares were down 2.1 percent on the London Stock Exchange at around 0950 GMT, underperforming a 1.1 percent rise in the sector.