Platinum-group metals (PGM) producer Aquarius Platinum last week delivered another increase in quarterly production and reminded investors that it had successfully concluded wage negotiations without any operational interruptions.

The world’s fourth-largest platinum pro-ducer reported a 22% increase in its June-quarter attributable production to 86 830 oz of 4E PGMs (platinum, palladium, rhodium and gold), from 71 230 oz a year earlier. The fourth-quarter performance is also a 7% increase on the third-quarter production results.

The Kroondal mine, a joint venture with Anglo American Platinum (Amplats), pro-duced 106 872 oz in the three months, of which 53 436 oz was attributed to Aquarius.

CEO Jan Nel described the significant improvements at Kroondal, particularly against the backdrop of volatile regional and industrial relations, as “particularly pleasing”, while London-based Liberium Capital praised the management of Aquarius for continuing to overcome challenges.

“They are the only company thus far to settle on wage negotiations and have done so without industrial action. With wage terms settled, the company is now uniquely positioned to survive the winter of wage negotiations and redundancies (but not immune), where industrial action seems almost a certainty else-where,” analyst Ben Davis said in a statement.

Aquarius announced the conclusion of a one-year wage agreement, which provides for an above-inflation increase from July 1, in June. Its bigger rival, Amplats, is due to start wage negotiations next month.

But Nel said that an 8% average decrease in dollar metal prices had offset the improved operational performance and, combined with a “difficult and complex” operating environ-ment, it reinforced the imperative of continued operational focus and improvement.

During the period under review, the average platinum price decreased by 10%, while pal- ladium decreased by 4% and rhodium by 6% quarter-on-quarter. Gold fell by 13% on average.

Aquarius also said that autocatalyst plati-num demand remained challenging, with the lowest vehicle sales in May in 20 years. And, while jewellery demand was set to increase with the recent dollar price drop, the company believed that it would be more so for gold than platinum.

“The greatest challenge remains that the current basket price remains simply too low for Aquarius to be significantly cash generative – to have sufficient cash to pay off the convertible debt in 2015, the PGM basket price would have to immediately rise to R16 589/PGMoz or 44% higher than today’s spot prices,” Liberum said.

Meanwhile, Aquarius reported a 7% decrease in cash costs to R7 746/oz at its Kroondal mine, while cash costs at its Mimosa operation, in Zimbabwe, remained constant at $871/oz.

Although the vamping contract at Kroondal was cancelled during the previous quarter, production for the quarter was 1.77-million tonnes, up 5% quarter-on-quarter.

The company also added another three years to the mine life of Kroondal by extending the pooling-and-sharing agreement with Amplats.

Capital expenditure (capex) at Kroondal totalled R117.29-million during the period under review, as the R33.79-million develop-ment of the K6 shaft infrastructure at the mine continued. The transition from contractor mining took place on May 1 and had been successfully completed with the K6 shaft-sinking project completed within budget and ahead of schedule.

However, almost all other project and growth capex had been placed on hold, pending improved market conditions. Aquarius indicated that it was continuing with the necessary maintenance capex required by its operating mines.

Aquarius’s 50%-owned 4 Shaft and processing plant at Marikana, in the North West, continued on care and maintenance until further notice, given the continuing low rand PGM basket prices. Similarly, the Everest mine, in Mpumalanga, remained on care and maintenance until further notice.

At the Mimosa mine, PGM output increased by 5% year-on-year and 11% quarter-on-quarter to 57 168 oz, of which 50% was attributable to Aquarius.

Capex for the fourth quarter amounted to $7.47-million and was incurred mainly on mobile equipment, drill rigs and load haul dump machines, the conveyor belt extension, down-dip development, the housing project, and Phase 6 prefeasibility studies.

Platinum Mile, Aquarius’s 91.7%-owned tailings operation at Amplats’ Rustenburg platinum mine, contributed 4 810 oz of 4E PGM to the company’s fourth-quarter production – a 70% year-on-year increase and a 53% quarter-on-quarter improvement. Head grade increased to 0.87 g/t and recoveries grew to 17%.