By Devon Maylie
JOHANNESBURG--Aquarius Platinum Ltd. (AQP.AU) said Wednesday it
expects a "material" surplus in the market to remain for the
short-to-medium term and prices to be "stagnant" in both U.S.
dollars and South African rand as a result.
The company, which last month put two of its mines on a care and
maintenance program because they were losing money in the current
weak price environment, said it continues to cut non-essential
spending to keep the overall company profitable.
South Africa produces roughly 80% of the world's platinum, a
metal largely used in cars to reduce emissions. With Europe, the
biggest consumer of platinum, economically struggling and China's
growth slowing, demand for the metal is dropping and industry
bodies predict the platinum industry to be in surplus.
Other platinum miners are also struggling.
Anglo American Platinum Ltd. (AMS.JO), the largest platinum
producer, said this week that earnings for the first half of the
year could be down as much as 20% from the year before, hit by
lower prices and a drop in sales.
And other companies including Royal Bafokeng Platinum Ltd.
(RBP.JO) and Platinum Australia Ltd. said they're reviewing their
South African mines.
The platinum industry was already reeling from a spate of mine
closures due to increased scrutiny from South Africa's department
of mineral resources safety division in the past year, which led to
several thousands of ounces of lost output across the sector.
Aquarius said Wednesday that it expects to produce 327,500 troy
ounces of platinum in the 2013 financial year, down from its
prediction to produce 440,000 ounces in the 2012 year.
The company said its Zimbabwe mine meanwhile remains profitable
and negotiations over a stake sale to the government to meet local
ownership laws is progressing.
Write to Devon Maylie at devon.maylie@wsj.com