UPDATE: Aquarius Shares Rebound On Ebbing Mine Regulation Fears

20th Jul 2010 02:53

(Adds price, union quotes, background) By David Fickling and Cynthia Koons Of DOW JONES NEWSWIRES SYDNEY (Dow Jones)--Shares in Aquarius Platinum Ltd. (AQP.AU) climbed nearly 12% Tuesday after the company said it had held "pragmatic" talks with South African officials about safety improvements to its underground mines in the country's North West province. The announcement eased fears that the provincial government would impose tough regulations, without consultation, to prevent rockfalls following the deaths of five Aquarius employees in an accident at the company's Marikana project on July 6. The principal inspector of mines in the North West province last week ordered miners to reduce the gaps between cavern pillars in underground mines to six meters from 10 meters and extract no more than 75% of ore from the chambers. Aquarius on Monday said it would appeal against the measures, arguing they would not be necessary to improve mine safety and would hurt profitability. In a release before the open of the Australian Securities Exchange Tuesday, the company said that North West province officials had largely conceded the point in a meeting with mining executives. The province's Department of Mineral Resources said it had not intended "to unilaterally prescribe mining methods", Aquarius said, and would work with miners to "collectively determine the best mining practices". Aquarius Chief Executive Stuart Murray said he was "greatly encouraged by the decisive leadership and co-operative attitude displayed" by the department. The company's shares were up 11.3% at 0145 GMT, climbing 45 cents to A$4.42. Any regulations would be likely to only affect underground mines in the province, which produce mainly platinum and chromite. South Africa is the world's biggest platinum producer, accounting for more than three quarters of global mine production. The Marikana accident brings this year's death toll in the country's platinum mines to 16, out of a total of 65 mine deaths across all commodities. Lesiba Seshoka, a spokesman for South Africa's National Union of Mineworkers, said that significant improvements could be made to underground mine safety if miners stopped carrying out blasting and drilling work on the same day, a separate issue from the pillar-spacing problem addressed by the provincial government. "We want to see them doing more to ensure the safety of our people," he said. "Actions speak louder than words." Aquarius is South Africa's fourth-biggest miner of the metal, after Anglo American Plc (AAL.LN) subsidiary Anglo Platinum Ltd. (AGPPY), Impala Platinum Holdings Ltd. (IMPUY), and Lonmin Plc (LMI.LN). -By David Fickling; Dow Jones Newswires; +61-2-8272-4689; [email protected] (END) Dow Jones Newswires July 19, 2010 21:53 ET (01:53 GMT)