Eastern Platinum Limited (ELR.TO: Quote, ELR.L) said Wednesday that it has decided to halt funding for the ongoing development of the Mareesburg open pit mine and construction of the Kennedy's Vale Concentrator Plant, citing continuing negative changes in the global economic environment and the operating environment in South Africa.
Since the decision was made to develop the project nine months ago, the price of platinum group metals, or PGMs, has declined significantly with little or no fundamental demand recovery or supply reduction forecast in the near to medium term.
In South Africa, the PGM industry is dealing with a number of economic factors, including unrelenting operating cost inflation, adverse currency exchange rates, weak chrome prices, heightened concerns with respect to reliable power delivery and unplanned and unlawful labour actions.
In view of the current operating environment, Eastern Platinum has taken the decision to suspend funding the project so as to maintain the value in the resources planned to be mined.
The overall project is 30 percent complete and a rapid restart of project construction could take place when conditions warrant.
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by RTT Staff Writer
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