Aquarius Platinum says it is too early to assess the impact of a shock South African mining directive that sent its shares down 17%.

The miner said a directive on the use of bord and pillar mining methods in the northwest of South Africa would apply to its two largest operations — Kroondal and Marikana — both joint ventures with Anglo Platinum.

The bord and pillar method is one in which material is mined horizontally leaving support pillars of untouched material. The directive wants all mechanised bord and pillar mines in the region to reduce the width of the bord, the gap mined between the pillars, to six metres from 10 metres.

Liberum Capital estimates that a reduction in bord width would equate to around a 20-25% loss in platinum group metal production at Kroondal and Marikana.

“That is way too high,” said Gavin Mackay, a spokesman for Aquarius. “It really has not been possible to even work out what the impact will be.”

The London-listed shares in Aquarius Platinum dropped as much as 17%, knocking $375 million from its value, to a one-year low. By 0929 GMT, they had pared losses to trade down 12% at 226,5 pence, valuing the miner at 1,25 billion pounds ($1,92 billion).

Suspended operations

On July 7, Aquarius was forced to suspend operations at a shaft of the Marikana operation following the death of five miners.

The accident was the second this month for Aquarius, although it is the first at Marikana, a 50:50 joint venture with Anglo American’s AngloPlat unit, since the second half of 2008.

Aquarius said it has yet to present its review of the accident to the Department of Mineral Resources. The shaft can only resume operating once the be review has been presented and assessed by the ministry.

Analysts had expected the shaft to be suspended for about one to two weeks.

Aquarius said it did not believe the bord and pillar directive would result in fewer accidents, but that it would have a detrimental economic effect on the Bushveld chromite and platinum mines.

South Africa’s Bushveld Complex is home to most of the world’s platinum group metal reserves.

The company was caught by surprise by the order which it received midday on Friday.

“Nothing of this nature was discussed” when the company’s Chief Executive Stuart Murray went to a July 15 meeting, convened by the Mining Minister Susan Shabangu, to discuss greater industry co-operation on safety, said Mackay.