Aquarius Platinum To Halt S Africa's Marikana Mine Due To Weak Price Outlook

Aquarius Platinum Ltd. (AQP.LN) said Tuesday it will halt its Marikana mine in South Africa due to low prices for the metal, a move analysts said could be the start of wider production cuts across the industry currently struggling with rising costs and weak demand.

"Trading conditions in the platinum industry are expected to remain difficult in the short-to-medium term and these conditions have rendered the operations at [Marikana] uneconomic," Aquarius said in a statement.

Marikana accounted for 42% of Aquarius' platinum output in 2011 and is run jointly with Anglo American Platinum Ltd. (AMS.JO).

The process to place the mine and concentrator on care and maintenance follows a decision by Anglo American PLC (AAL.LN) earlier in the year to review its platinum operations, which it said could include closing some mines.

And in May, Lonmin PLC (LMI.LN), the world's third largest primary platinum producer, warned there was a risk production plans in the industry could change, given "an unrelenting depressed pricing environment."

Platinum prices on the spot market are trading down around 17% from the 2012 high hit in February. Costs are up in South Africa, the world's largest platinum producer, while demand for the metal, which is largely used in cars to clean exhaust, is weak.

"We believe we may finally be close to witnessing industry-wide supply discipline and production cuts," said Dominic O'Kane, an analyst at Liberum Capital.

Marikana produced 52,962 troy ounces in its 2011 financial year.

-By Devon Maylie, Dow Jones Newswires; [phone]; [e-mail] (Francesca Freeman in London contributed to this report.)