Diversified mining group Xstrata Alloys reports that platinum group metal (pgm) volumes declined in the first quarter of the year compared with 2010 figures.

In its update for Q1, the firm said pgm production was "substantially" lower than the year before as a result of delays in the award of the section 102 mineral rights extension of the current Eland open pit operation in the Western Limb of South Africa's Bushveld Complex.

The mineral rights were awarded at the end of January, but the delay entailed lower grade oxidised ore being mined and reduced concentrator throughput and recoveries.

Production was also affected by blasting restrictions placed on the eastern pit due to its proximity to a major national road.

As a result of these setbacks, output of platinum declined from 32,905 oz in the first quarter of 2010 to 22,367 oz between January and March 2011.

Palladium ended the quarter at 11,443 oz, down by around a third from 16,601 oz last year.

Rhodium output also fell, dropping from 5,395 oz to 3,620 oz over the same period.

For the year ending December 2010, Xstrata mined 117,659 oz of platinum, 59,584 oz of palladium and 19,602 oz of rhodium.

However, the firm said the development of both decline shafts at Eland is "progressing well" and initial production from the Nyala shaft is expected during the fourth quarter of 2011.

Xstrata, which also has interests in copper, coking coal, thermal coal, ferrochrome, nickel, vanadium, zinc, gold, cobalt, lead and silver, said production from Eland's underground operations will deliver around 250,000 tonnes per month by the end of 2013.

By 2015, steady state annual platinum production should reach 300,000 ounces.

"Xstrata's operating and financial performance continues to be strong and the company's financial position remains robust," the firm added in a statement.

Source:



Interim Management Statement and 2011 Q1 Production Report (04/05/11) 

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