Share

Lonmin maintains output target, cuts spending

London - Lonmin [JSE:LON] the world's third-largest platinum producer, said on Thursday it would maintain its annual production target but cut capital expenditure in 2015 as it battles with low metal prices.

Along with its peers in South Africa, Lonmin has been battered by labour unrest overs wages last year, rising costs and stubbornly weak platinum prices.

The stock has lost almost half of its value in the last year and was the worst hit among the three largest miners involved in a 5-month-long industrial action in 2014.

"Because of low dollar metal prices and short- to medium-term uncertainty around platinum prices we will reduce our expected capital expenditure for 2015 from $250m to $185m and will keep this under review," the company said in a statement.

On Thursday, the mining company posted an increase in mined output for the first quarter of its financial year which ended in September.

But technical issues that forced it to stop two furnaces at its South African plant in December are reducing its refined platinum production.

Saleable metal-in-concentrate in the first quarter at 200 170 ounces was up 11.4% year on year and its highest first-quarter production since 2007.

Refined platinum production at 139 823 ounces was down 28.8 percent, hit by a furnace stoppage in early December.

"We are disappointed that the repairs and maintenance to both our main furnaces necessitated by the shutdowns have overlapped and caused a temporary bottleneck in our processing operations," the company said. "We expect to process the build-up of concentrate by the end of 2015."

The miner annual target is to produce saleable platinum metal in concentrate in the region of 750 000 ounces and to sell around 730,000 platinum ounces.

As a direct consequence of lower sales in the first half due to the furnaces stoppages the company expects its borrowing to rise.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.05
-0.8%
Rand - Pound
24.04
-0.6%
Rand - Euro
20.56
-0.4%
Rand - Aus dollar
12.37
-0.2%
Rand - Yen
0.13
-0.8%
Platinum
899.20
+0.3%
Palladium
999.25
-0.3%
Gold
2,209.51
+0.7%
Silver
24.55
-0.4%
Brent Crude
86.09
-0.2%
Top 40
68,080
+0.6%
All Share
74,278
+0.5%
Resource 10
56,967
+2.4%
Industrial 25
103,572
+0.3%
Financial 15
16,456
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders