Eastplats puts Crocodile River mine on care and maintenance

TSX-, Aim- and JSE-listed Eastern Platinum (Eastplats) will place its Crocodile River mine (CRM) on care and maintenance, with about 92% of employees to be retrenched or have their employment terminated by mutual agreement, the company announced on Tuesday.

This followed an announcement, in April, that the company would suspend funding for the CRM development plan, owing to the continuing negative outlook in the global economic environment, the sustained weakness in platinum-group metals prices and the current operating environment in South Africa.

“We have been struggling through a perfect storm of increasing costs on all fronts and depressed metal prices. With ongoing labour unrest that continues to negatively impact productivity throughout the South African mining sector, the stagnant commodity market and rising costs, it has become impossible to justify continued production operations at this time,” said Eastplats president and CEO Ian Rozier.

The company would immediately start scaling down operations at the mine, with production to stop at the end of July. Production would not resume until the company could achieve economic and sustainable production from CRM.

Meanwhile, Eastplats’ subsidiary Barplats Mines had concluded a 60-day consultation process with unions and other representatives, facilitated by the Commission for Conciliation, Mediation and Arbitration, on June 21.

Barplats had, in April, issued Section 189 notices to employees to inform them of the care-and-maintenance restructuring proposal for the mine.

Eastplats said three unions, representing 47% of the total workforce, had concluded a settlement agreement with the company and recommended acceptance of the retrenchment proposal to their members.

However, one union has not recommended acceptance of the proposal.

Employees who do not accept the full and final settlement proposal will receive the company’s retrenchment package as offered at the final facilitated consultation meeting, the company stated.

Eastplats' share price on the JSE fell by 9.09% on Tuesday to a daily low of 70c a share, compared with 77c a share on Monday.

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