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TSX-listed Eastern Platinum (Eastplats) reveals that a Section 52 Notice in terms of the Mineral and Petroleum Resources Development Act (MPRDA) of 2002 was submitted to the Minister of Mineral Resources of South Africa on June 22, 2013 with respect to the curtailing of mining operations at the Crocodile River mine (CRM).

This follows the company’s decision to suspend funding for CRM for the reasons outlined in the news release of April 19, 2013.

On April 22, 2013 Barplats Mines (BML) issued notices to employees in terms of Section 189 of the Labour Relations Act 66 of 1995 with respect to a care and maintenance and restructuring proposal for CRM. BML also requested that the Commission for Conciliation, Mediation and Arbitration appoint a facilitator for the requisite 60-day consultation process.

This consultation process with the unions and other representatives ended upon the expiry of the 60-day period on June 21, 2013.

Three unions representing 47% of the total workforce concluded a settlement agreement with the company and have recommended acceptance to their members in return for full and final settlement of all and any claims between the company and members of those unions.

One union has not recommended acceptance of the company’s retrenchment proposal. Employees who do not accept the full and final settlement proposal will receive the company’s retrenchment package made at the final facilitated consultation meeting.

As stated in the Section 52 Notice, mining operations at CRM are to be scaled down with the effect that approximately 92% of CRM’s employees are either to be retrenched or their employment terminated by mutual agreement. The company will be meeting all its commitments with respect to its environmental management programmes and the relevant aspects of its social and labour plan.

Production at CRM will be scaled down with effect from June 22 and will cease by the end of July 2013. Production will not resume until it is clear that there can be economic and sustainable production from CRM.

Eastplats said it has made a significant investment in infrastructure at CRM, and BML’s care and maintenance proposal for the mine will ensure that the mine remains in a state of operational readiness in order to take advantage of this investment and to secure future employment opportunities for when economic conditions and the operating environment improve.

“This is a very regrettable outcome. However, BML’s care and maintenance proposal is the best for all stake holders since nobody wants to see the mine close permanently. We have been struggling through a perfect storm of increasing costs on all fronts and depressed metal prices.

“With ongoing labour unrest that continues to negatively impact productivity throughout the South African mining sector, the stagnant commodity market, and rising costs, it has become impossible to justify continued production operations at this time”, stated Ian Rozier, president and CEO of Eastplats.

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