May 12, 2011 / 3:34 AM / 7 years ago

UPDATE 2-Eastern Platinum says workers halt flagship mine, shares fall

* Says mine operating now, but workers still protesting

* Co mulls legal action against workers who are still protesting

* Q1 loss/shr $0.01 vs breakeven per share a yr ago

* Shares fall 3 pct in Johannesburg (Adds details on mine disruptions, share movement)

May 12 (Reuters) - Eastern Platinum Ltd posted a quarterly loss on lower output and the Canadian company said its flagship Crocodile River mine project in South Africa was damaged following a wage dispute with the National Union of Mineworkers (NUM).

After Eastern’s revised wage offer was rejected last week by the union, about 180 workers occupied the Zandfontein and Maroelabult mines and damaged facilities.

The underground electrical and pumping equipment were sabotaged resulting in flooding, and ventilation systems were also damaged, the company said in a statement.

The mine was vacated on May 7, but the company had to suspend operations at Crocodile River pending the results of a safety inspection.

Shares in Eastern Platinum dropped 3 percent in Johannesburg. The stock was down 3.02 percent at 7.70 rand, compared with a 1.29 percent fall in Johannesburg’s All-Share index .

The Vancouver-based company said the mine is now operating, but employees are still protesting and blocking the mine entrance to prevent non-striking employees from entering.

The company said it intends to take legal action against workers who do not report for work from Thursday’s morning shift.

Eastern Platinum operates the Crocodile River mine on the Western Limb of the Bushveld Complex. It has assets on both the western and eastern limbs of the Bushveld Complex, which holds about 80 percent of the world’s platinum supply, according to the company’s website.


Eastern said on Wednesday it had a first-quarter loss of $5.6 million, or 1 cent per share, compared with earnings of $824,000, or breakeven per share, a year earlier.

The company’s platinum group metals production, which includes platinum, palladium and rhodium, fell 17 percent in the first quarter.

Platinum prices hit a 2-1/2 year high in February, but on Wednesday the platinum group metals fell in line with the rest of the commodities complex. On Thursday, platinum was at $1,749.74 an ounce against $1,770.10, while palladium was at $693.10 against $701.50.

Eastern Platinum shares closed at C$1.04 on Wednesday on the Toronto Stock Exchange. (Reporting by Aftab Ahmed and Bhaswati Mukhopadhyay in Bangalore; Editing by Matt Driskill, Jarshad Kakkrakandy)

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