JOHANNESBURG (Reuters) - Toronto-based Atlatsa Resources ATL.TO has agreed with joint venture partner Anglo American Platinum (Amplats)(AMSJ.J) to place its Bokoni mine in South Africa on care and maintenance as part of a restructuring plan.
The platinum sector has been under huge pressure, hit by falling product prices, rising costs and labor disputes that have affected much of a South African mining industry that contributes about 7 percent to the nation’s economy.
Atlatsa, which manages the Bokoni mine, said it will cease operations at Bokoni “as soon as reasonably possible”, though it did not provide any detail on potential job losses.
Job cuts are a thorny issue in South Africa, where the unemployment rate is at a 14-year high.
Atlatsa said it had struck a deal with Amplats to mothball the mine after it failed to turn a profit despite turnaround efforts that began in 2014.
“The immediate to medium-term outlook for Bokoni mine remains negative, given the current weak PGM (platinum group metals) pricing environment,” Atlatsa said in a statement.
Amplats will fund all costs associated with the care and maintenance process and will suspend servicing and repayment of all current and future debt owing by Atlatsa until the end of 2019 as part of the restructuring, Atlatsa said.
Reporting by Tanisha Heiberg; Editing by James Macharia and David Goodman