aquarius chief predicts consolidation

interesting article...you'd think PLA, with its significant production profit margins, will be pretty high up in the list of potential TKO targets.

Cdchi1

Aquarius chief predicts consolidation as platinum prices fall
Jamie Freed
February 7, 2009
AQUARIUS Platinum has predicted 2009 will be the year of consolidation in the South African platinum industry as miners struggle to survive in a time of low prices in light of weak demand from the automotive industry.
"I think [there will be] consolidation of the many to produce a few stronger players, like other sectors in the economy," Aquarius's chief executive, Stuart Murray, said.
He said that Aquarius - the largest Australian-listed platinum producer but a second-tier player in global terms - was talking with rivals about potential deals. It has looked at mergers with LionOre Mining and Lonmin which never eventuated.
Aquarius has mines in South Africa and Zimbabwe. It is trying to refinance $US166.7 million ($255 million) of debt by June 30 to maintain its viability after reporting a $US70 million half-year loss.
Mr Murray told analysts refinancing negotiations with the lender, Rand Merchant Bank, were under way and details of a deal were likely to be provided within three to four weeks.
However, market sources told the Herald the miner may need to raise equity to shore up its balance sheet as part of any refinancing package.
Aquarius suffered a large financial hit from the impact of provisional pricing during the second half.
The price of platinum, which is primarily used for industrial applications but also for jewellery, plunged from $US2000 an ounce in June to as low as $US771 an ounce in October and is now trading at $US974.25 an ounce.
The price of rhodium - a key platinum byproduct of which 89 per cent is sold to the car industry for use in catalytic converters - has fared more poorly than any other commodity as part of the global economic slump. It reached a peak of $US10,050 an ounce in mid-June but is now trading at $US1100 an ounce.
Mr Murray said cash-strapped automakers were accepting all of their contracted volumes of platinum and rhodium in order to ensure they were not short of the products when the industry rebounded, but they had been liquidating the inventories on the spot market in light of the present lack of demand for new cars.
He said there were no plans to close Aquarius's Marikana mine, which has relatively higher costs than its Kroondal and Mimosa mines. He said cost-cutting measures and a change in the mine plan meant it should be cash flow neutral to slightly positive at present prices.
Mr Murray said the Everest mine, closed in December after a geotechnical incident, would not be reopened for at least six months, and even that timing was uncertain at current prices.