Attributable production from the operating mines of JSE-listed Aquarius Platinum increased by 2% quarter-on-quarter to 78 987oz in the three months to December 31, when the transition to owner-operator was completed below budget under new CEO Jean Nel.

Liberum Capital analyst Ben Davis described Nel’s start as “solid” and commended what he calculated to be strong production and good cash costs at Kroondal platinum mine as well good indigenisation terms at the Mimosa mine, in Zimbabwe.

Kroondal’s cash costs were down 7% to R8 403/oz and up 8% at Mimosa to $897/oz.

With the platinum-group metals (PGMs) basket price up 5% in dollar terms, a drop in cash consumption is expected.

Approval of the Booysendal transaction will lapse if not granted before the end of April.

While Liberum recommended that the share continue to be held, it fell by more than 6% in Johannesburg last week to 900c a share.

Roll-out of the revised hanging wall system has been completed.

“From a PGM supply and demand perspective, there seems to be consensus that both platinum and palladium will move into primary supply deficit during 2013,” Nel said.

While encouraging the increase in recycling, the continued depressed demand from auto producers and the substantial above-ground inventories rendered significant further price increases unlikely.

At the beginning of the quarter, the PGM rand basket price continued to rise as persistent illegal strikes triggered concerns for both future supply of PGMs and how it would impact on the overall South African economy.

But the supply pessimism was short-lived as the basket price peaked at R12 398/oz in mid- October from a trough of R9 525/oz in mid-August, at which point the dollar metal prices began to retreat.

But by the end of October, platinum and palladium were both trading at two-month lows.

In November, following the conclusion of the US Presidential elections and the anticipation of a continued expansionary monetary policy, commodity prices strengthened and PGM prices were further supported by the publication of Johnson Matthey’s ‘Platinum 2012 Interim Review’ highlighting a global deficit in platinum as a result of reduced supply from South Africa and a decline in open-loop recycling.

However, illegal strikes, together with negative news surrounding the eurozone economy and investor nervousness over the US ‘fiscal cliff’ at the end of the period, weighed on PGM prices and resulted in a disappointing end to a difficult quarter, Aquarius said.

Platinum Mile’s results were hit by strikes at Anglo Platinum and the Chromite Tailings Retreatment Plant remains on care and maintenance.

After Stuart Murray resigned as CEO, Nel was appointed CEO on November 5 and Zwelakhe Mankazana was appointed non- executive chairperson of the South African company.