Lonmin production hit by workers’ deaths


Lonmin production hit by workers’ deaths

Published Date: 2019-02-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Lonmin production hit by workers’ deaths

Safety stoppages at its mines following two fatalities resulted in 95,000 tonnes of lost mining production.

Lonmin has reported a drop in first-quarter production due to safety stoppages after two workers died at its mines.

The platinum producer, which is in the process of merging with larger rival Sibanye-Stillwater, said the Section 54 stoppages resulted in 95,000 tonnes of lost production in the three months to end-December, up from 8,000 tonnes previously.

Total mining production declined by 7%, or 166,000 tonnes, to 2.2-million tonnes from a year earlier. Refined platinum production fell 10.4% to 144,651 ounces due to reduced mining tonnes, lower grades and recoveries.

The group sold 4.6% less platinum, while sales of all platinum group metals (PGMs) declined by 12.7% to 255,152 ounces. It benefited from a 11.2% rise in the dollar basket prices for its metals to $1,076 per ounce. The rand basket price jumped 17% to R15,389 per ounce as the rand weakened by an average 5% against the dollar.

The group said it was maintaining its full-year sales, costs and capex guidance. It said the challenges of its first quarter and the volatility of the exchange underscored the vulnerability of its business and the importance of a sustainable solution for the company.

Although Lonmin returned to profitability in its last financial year, the company continues to face liquidity constraints, with significant investment needed in its mines to prolong their lifespan. It believes the group will be better placed as part of a stronger, larger and diversified group following its tie-up with Sibanye-Stillwater. The two companies extended the longstop date for their merger to 30 June after the Association of Mineworkers and Construction Union (AMCU) appealed the Competition Tribunal's approval of the transaction. the appeal has been set down for 2 April

Lonmin's share rose 8% to R11.74 on Friday. Sibanye-Stillwater gained 8.1% to R14.21.

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