OT: South African Government Strengthens Regulations For Safety At Platinum And

HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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luker

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OT: South African Government Strengthens Regulations For Safety At Platinum And

posted on Jul 28, 2010 12:42PM

South African Government Strengthens Regulations For Safety At Platinum And Chrome Mines

= Regulations Cause To Raise Costs And To Shorten Operations, This Measure Is Creating Stir In Mining Industry

The Government of South Africa has determined to strengthen the regulations for safety in operations at platinum mines and chrome mines, which have been concentrated on North West Province, and this measure is creating a stir in the mining industry of South Africa.

There is a strong view in the market that platinum mines will be obliged to decrease platinum production and to reduce employees. Many of ferro-alloy producers in South Africa have been reprocessing tail-ore generated from platinum mines to UD2-chrome ore and this reprocessed chrome ore is being used as raw material for production of ferro-chrome. Therefore, the matter to strengthen the regulations for safety will put a substantial influence on raw material for ferro-chrome.

Also, chrome mines have become the object to strengthen the regulations for safety. Open-cast mining mines are not affected by this measure but pit-mining mines will be inevitable to be influenced by the regulations for safety. For a reference, approximately 50% of chrome ore to be produced in South Africa is thought to come from North West Province. On the other hand, among 12 platinum mines in South Africa, 9 mines have been concentrated on North West Province.

The largest arrangement to maintain the safety at pit-mining mines scheduled to be enforced in this time by the Government of South Africa is to reinforce rock bed at ceiling and, for this purpose, it is necessary to shorten the distance of pillars from 10 meters at present to 6 meters as planned. By this arrangement, the safety for operations at platinum mines and chrome mines is estimated to be strengthened by 40% but, on the other hand, the costs at platinum and chrome mines will be inevitable to raise to a certain extent.

Therefore, the major mining companies concerned, such as Xstrata-Merafe Chrome Venture, called on the Government of South Africa in this week and the Government explained them about this arrangement. However, these mining companies have been entirely not satisfied with this enforcement of the regulations for safety. Under the situation which a raise of the costs is inevitable, in view of many accidents occurred at mines in South Africa, it is questioned how do the mining industry of South Africa cope with the matter for safety.

There is an opinion in the mining industry of South Africa that, owing to this arrangement to strengthen the regulations for safety at mines, part of platinum mines have to reduce their production of platinum by 8% in 2010 and by 28% in 2011 as the maximum.

For a reference, by the accident occurred in 2009 at a deep part of gold and platinum mines of South Africa, 167 mineworkers were killed.