By Esha Vaish
Feb 7 (Reuters) - Aquarius Platinum Ltd, the world'sfourth-biggest platinum miner, reported a lower half-year lossas a rise in output from its Kroondal mine in South Africalessened the impact of a drop in prices of platinum group metals(PGMs).
Aquarius, which operates mainly in the strike-prone SouthAfrican platinum belt, reported a headline loss of $22 millionfor the half year ended Dec. 31, down from $56 million in thesame period a year earlier.
Revenue slipped 2 percent to $113 million, whileattributable production increased 7 percent to 168,014 PGMounces. PGM metals include palladium, iridium and other metals.
The average U.S dollar PGM basket price dropped 5 percent inthe half-year from the same period a year earlier, Aquariussaid, while the rand basket price rose 13 percent as the SouthAfrican currency weakened.
The company said it was concerned that dollar-denominatedmetal prices fell despite a primary deficit in PGM metal marketsduring 2013, which is forecast to increase in 2014.
Aquarius reported revenue of $106 million from Kroondal - aventure with Anglo American Platinum in the northwestprovince of South Africa.
"They are doing everything they can at Kroondal, which is anamazing operating performance, if we compare that to the rest ofthe Bushveld especially," Nomura Equity Research analyst TylerBroda told Reuters.
The world's top three platinum miners -- Anglo AmericanPlatinum (Amplats), Impala Platinum Holdings Ltd andLonmin Plc -- have interests in South Africa's Bushveldcomplex, the world's richest reserves of PGMs.
The three miners are trying to hammer out wage agreementswith South Africa's largest labour body, the Association ofMineworkers and Construction Union (AMCU), to end a two-weekstrike that the country's Chamber of Mines says is costing theindustry about $18 million a day in revenue.
AMCU members walked out at Amplats, Impala and Lonmin onJan. 23.
London-listed Aquarius Platinum was largely shielded fromthe strike as it signed a one-year agreement with the NationalUnion of Mineworkers last June. The company said in January thatit expected the strike at other miners to help it post higherrevenue and better margins.
"Having already reached a wage agreement at Kroondal,Aquarius may benefit from production disruptions at the majorproducers should they result in higher PGM price in the shortterm," BMO Capital Markets analyst Edward Sterck said in a note.
UNCERTAINTY IN ZIMBABWE
Aquarius Platinum raised concerns last month about itsMimosa mine in Zimbabwe, as proposed tax changes and regulatoryuncertainty had left it unable to plan future production levelsand capital allocation.
Zimbabwe's platinum sector has largely been an attractivezone for foreign miners due to its current low tax environment.
However, foreign miners are jittery about the looming threatof President Robert Mugabe's controversial indigenisation policyand additional taxes proposed in the 2014 budget.
"The implementation of further taxes would have asignificant negative impact on the profitability and cash flowsof the entire Zimbabwean platinum sector, particularly in thecurrent low price environment," the company said.
Analysts also raised concerns about Aquarius Platinum'sability to pay out a $300 million convertible loan due in 2015.
"Our concerns remain as to whether the operationalimprovements alone are sufficient to warrant the refinancing ofthe $300 million convertible which falls due at the end of nextyear, while the platinum pricing environment remains weak,"Investec Securities analysts said in a note to clients.
The company had a cash balance of $83 million at the end of2013.
Aquarius Platinum's shares were largely unchanged at 39.25pence at 1042 GMT on the London Stock Exchange on Friday.
