Anglo Platinum to suspend production at Rustenburg mine after worker deaths

Anglo Platinum to suspend production at Rustenburg mine after worker deaths

By Robb M. Stewart, MarketWatch

18th June 2007

Last Update: 5:15 AM ET Jun 18, 2007

JOHANNESBURG -- Anglo Platinum Ltd. (AMS.JO), the world's largest producer of platinum, Monday said it plans to suspend production at its Rustenburg mine for about seven days following the deaths of five workers in the past two weeks.

The halt in output is expected to reduce production in 2007 by between 10,000 and 15,000 ounces of refined platinum, with a proportionate reduction in associated byproducts, Angloplat said in a statement to the Johannesburg securities exchange.

"Employee safety is our highest priority, and where extreme steps are necessary we will not hesitate to take action," Chief Executive Ralph Havenstein said.

The company said it will suspend production at each underground shaft at Rustenburg for between five and seven days to implement safety measures, but staggered over a five-week period in order to improve contact between management and employees.

The recent deaths at the mine brought the total so far this year to 12.

Angloplat said that despite initiatives already in place, management in consultation with parent company Anglo American PLC , decided to take immediate action and suspend production.

"The audit of each workplace will ensure that measures are in place to safely implement the suspension of production and will identify and address any new factors that contributed to the deterioration," it said.

Angloplat in 2006 boosted production of refined platinum 15% to just shy of 2.82 million ounces. Output at the Rustenburg Section, located west of Pretoria, produced 942,000 ounces of platinum, 465,600 ounces of palladium and 180,500 ounces of rhodium as well as smaller amounts of gold, nickel and copper.

At 0805 GMT, Angloplat shares were up ZAR13, or 1.1%, at 1,233, in line with an advance in the broader market in Johannesburg.

South Africa's National Union of Mineworkers has in recent weeks condemned what it described as a lack of training and a failure to follow safety procedures at Angloplat's operations, and said it is concerned by what it sees as an increasing number of fatalities and deaths in the mining industry.

NUM and other unions are renegotiating wage agreements with mining companies that are due to expire at the end of the month.

Angloplat has raised its offer to unionized workers in the country to 7%, one percentage point higher than it had previously tabled but still shy of the 15% hike demanded by unions.