Johannesburg — AQUARIUS Platinum's share price fell heavily yesterday on news in a quarterly production report that it could shut its Blue Ridge mine for up to seven months to make it a more productive and safer operation.

Aquarius reported a 7% increase in attributable production to 110774oz of platinum group metals (PGMs), but behind the figures were a number of problems. Key among these is the potential seven-month closure of Blue Ridge, which is still in development mode, to alter what the company has described as a badly designed mine.

"A good set of production results released today were upset by news that the company was considering suspending operations at Blue Ridge for seven months to upgrade infra- structure," said Bank of America Merrill Lynch.

Two people were killed in separate incidents in the three months to end-June at Blue Ridge, which Aquarius shares equally with Imbani Platinum. The mine lost 22 days to safety-related shutdowns in the quarter.

The loss of production from the shutdowns was worsened by "extremely high levels of labour turnover ... largely due to the active poaching of skilled personnel by competitors", Aquarius said in a statement yesterday.

The owners of Blue Ridge will decide whether to shut the mine for seven months to install a second decline that previous management had decided against.

"We can either limp along with things as they are or stop and fix it over seven months, putting in a bit more capital expenditure and have a much better mine with lower costs," said Aquarius spokesman Gavin Mackay.

The mine's output had already been lowered by 20 000oz to 80 000oz for the 2011 financial year and this could fall as low as 40000oz if mining is halted. Because the mine is in development, the ounces do not go to revenue, but offset capital.

"Uncertainty remains regarding production volumes that will be lost at Blue Ridge, the capital required to develop the second decline, and lastly, the cost impact of the roll-out of the safety measures agreed with the Department of Minerals Resources," Bank of America Merrill Lynch said. Management has estimated a 5% increase in unit costs.

At Marikana, the mine at which five people were killed when a 500-ton block of rock fell from the tunnel roof this month, adjustments have been made to the mining method to make it safer. The mining method has been changed from bord and pillar to room and pillar, which means the pillars are longer and better able to support the tunnel roof. Volumes were unaffected, Mr Mackay said.

Aquarius made a submission to the Department of Mineral Resources on July 22, outlining its plans, and the parties had reached mutual agreement, Aquarius said. The plan will be rolled out at Marikana and Kroondal.

Kroondal, the main operation of Aquarius, jointly held with Angloplat, turned in a strong performance, with production rising 5% to 108438 PGM ounces.