Safety stoppages hit Lonmin Q1 production

London - Miner Lonmin [JSE:LON], the world’s third-largest platinum producer, posted a rise in first-quarter output despite the impact of safety stoppages which it warned could hit both sales and costs if current trends persist.

Platinum metal in concentrate was up 3.5% in the quarter to the end of December, with refined platinum production up 24.3%.

Lonmin said platinum sales rose 39.8% in the quarter to end-December to 92 863 ounces against a year-ago period hit by bad weather, while total platinum group metals (PGM) sales were up 2.9% to 189 590 oz.

“Our production performance to date still supports our sales guidance for the current year of 750 000 ounces of platinum,” the miner said. “However, platinum sales and unit costs will be adversely impacted should the current trend of production losses from safety persist.”

Safety stoppages, which have battered the South African platinum sector, resulted in 177 000 tonnes of lost production, the miner said.

Anglo American’s Anglo Platinum [JSE:AMS] unit warned last week that 2011 profit likely fell by about a third, due to a black empowerment deal but also because of a high number of safety stoppages and higher costs for labour and power.

Lonmin said the average price it received for its platinum dipped 3.3% to $1 136/oz over the quarter.

Spot platinum prices fell over 20% over 2011 but are currently off December’s lows, trading around $1 577/oz.