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Q2 2013 Production Report
Lonmin Plc
(Incorporated in England and Wales)
(Registered in the Republic of South Africa under registration number 1969/000015/10)
JSE code: LON
Issuer Code: LOLMI & ISIN : GB0031192486
("Lonmin")
REGULATORY RELEASE
13 May 2013
Q2 2013 Production Report
Lonmin Plc. (Lonmin or the Company), the world's third largest Platinum producer, today announces its production
results for the quarter to 31 March 2013 (unaudited).
Overview
Our operations delivered a solid performance in the second quarter, exceeding our ramp up plan to produce Platinum
metal in concentrate of 180,562 ounces and Platinum sales of 217,800 ounces. This performance, taken with the
results and momentum established in the first quarter, has resulted in revised Platinum metal in concentrate and cost
guidance for the full year which is contained in our Interim Results announcement also issued today.
Towards the end of Q2 we experienced the re-emergence of Section 54 safety stoppages and management induced
safety stoppages as well as intermittent labour disruptions. Total tonnes mined were as a result 2.8 million tonnes,
down 4.3% on the prior year period and 4.7% on Q1 2013.
Our rolling average Lost Time Injury Frequency Rate (LTIFR) for the quarter of 3.66 incidents per million man hours
compared to 4.69 for Q2 2012 and 3.74 for Q1 2013. We experienced two fatalities in April 2013, this is unacceptable,
and management is focused on embedding the behavioural competencies that underpinned the safety achievements
recorded in the first half of the financial year.
Mining Division
Total tonnes mined in the second quarter of the 2013 financial year from our Marikana underground operations were
2.6 million, a decrease of 179,000 tonnes or 6.5% from the prior year period. The decrease was mainly a result of the
anticipated ramp up in production following the Marikana events notwithstanding the ramp up exceeding
expectations the resurgence of Section 54 safety stoppages (resulting in 62,000 tonnes of lost production) and labour
disruptions.
Production at the Karee operations decreased by 38,000 tonnes or 3.0% on the prior year period as a result of the loss
in production from Section 54 safety stoppages and machine breakdowns which constrained production in the UG2
area, as well as the planned non-contribution from K4, which added 25,000 tonnes in the prior year quarter. However,
these difficulties were mitigated by the continued momentum at the K3 shaft.
Westerns production declined by 50,000 tonnes or 6.7% with 12,000 tonnes lost to labour disruptions. The balance
was due to the planned continued depletion of reserves at Newman and ore reserve and infrastructure challenges at
Rowland around hoisting logistics. A pilot project around de-bottlenecking has commenced to address the hoisting
constraints and improve production at Rowland.
Middelkraal registered a 15,000 tonne or 3.0% decline due to a slight loss in traction at Saffy, partly as a result of the
Section 54 safety stoppages and management induced safety stoppages that occurred during the quarter. Easterns
declined by 76,000 tonnes of production or 26.8% when compared against the prior year period primarily due to
losses from Section 54s at E2 and E3, which accounted for around 20,000 tonnes, as well as labour disruptions and the
continued planned decline at E1.
Production at our Merensky opencast operations in the period was 133,000 tonnes, an increase of 55,000 tonnes or
69.7% when compared to the prior year period following interventions to stabilise grade and implement best practice
methods to optimise production. The production from Pandora was flat at 51,000 tonnes.
The total lost production due to Section 54 safety stoppages, most of which was lost in March 2013, was 82,000
tonnes. This compares to 170,000 tonnes lost in the prior year period. An additional 27,000 tonnes of production was
lost as a result of management induced safety stoppages, compared to 31,000 tonnes in the prior year, and a further
31,000 tonnes of production was lost mainly as a result of labour unrest at Westerns, Opencast operations and our JV.
A summary of the direct impact on production of Section 54 safety stoppages is detailed below.
Division Q2 2013 Q2 2012
Section 54 stoppages Section 54 stoppages
production impact production impact
Tonnes Tonnes
Karee 19,000 54,000
Westerns Nil 45,000
Middelkraal 23,000 60,000
Easterns 20,000 Nil
Opencast and JV 20,000 11,000
Total 82,000 170,000
Process Division
Total tonnes milled in the second quarter were 2.8 million, a decrease of 4.8% from the prior year, due to building
stocks after the Christmas break and the Number One UG2 concentrator being taken down at the start of the financial
year for planned capacity upgrades. The UG2 concentrator is due to come back online in the fourth quarter of FY
2013. The capacity constraint was mitigated by higher milling rates and improved availability at the other plants.
Underground milled head grade in the quarter was 4.62 grammes per tonne (5PGE+Au), up 0.16 grammes per tonne
or 3.5% compared to the prior year period. The opencast grade was 2.89 grammes per tonne, a 7.8% improvement on
the prior year period. The overall milled head grade was 4.54 grammes per tonne, an increase of 4.1% when
compared to the prior year period, benefitting from a 1.6% increase in mined UG2 as well as our continued focus on
quality factors and stabilising opencast production and grade.
Underground and overall concentrator recoveries reached 86.8% in the quarter, an improvement of 1.4% or 1.2
percentage points when compared to the second quarter of the 2012 financial year.
Platinum metal in concentrate from the Marikana operations for the quarter was 170,830 saleable ounces, a decrease
of 1.6% compared to the prior year period. Including Pandora and concentrate purchases, the concentrators produced
180,562 saleable ounces of Platinum in total for the quarter, a slight decrease of 0.3% when compared to the prior
year period. The decrease in tonnes milled due to the planned upgrade of our Number One UG2 concentrator was
offset by improved grades and recoveries.
Total refined production for the quarter was 190,629 ounces of saleable Platinum, largely flat on the prior year period,
with 370,671 ounces of Platinum Group Metals (PGMs) produced in the quarter up 4.2% on the prior year period.
Sales & Pricing
Sales for the second quarter of the 2013 financial year were 217,800 Platinum ounces and 404,176 PGM ounces with
Platinum sales being 3.4% lower than the prior year period and PGMs 3.5% lower.
The US dollar basket price including base metal revenue at $1,244 per PGM ounce was 1.3% higher than the prior year
quarter. The corresponding Rand basket price at ZAR 11,109 was 17.4% higher than the prior year period driven by the
weaker rand.
Lonmin also publishes today, in a separate announcement, its Interim Results for the half year ended 31 March 2013.
-ENDS-
ENQUIRIES
Investors / Analysts:
Lonmin
Tanya Chikanza (Head of Investor Relations) +27 11 218 8358/
+44 20 7201 6007
Ruli Diseko (Investor Relations Manager) +27 11 218 8300
Media:
Cardew Group
James Clark / Alexandra Stoneham +44 20 7930 0777
Sue Vey +27 72 644 9777
Brunswick - Johannesburg
Tshepo Mophiring +27 11 502 7400/
+27 82 887 4124
Notes to editors
Lonmin, which is listed on both the London Stock Exchange and the Johannesburg Stock Exchange, is one of the
world's largest primary producers of PGMs. These metals are essential for many industrial applications, especially
catalytic converters for internal combustion engine emissions, as well as their widespread use in jewellery.
Lonmin's operations are situated in the Bushveld Complex in South Africa, where nearly 80% of known global PGM
resources are found.
The Company creates value for shareholders through mining, refining and marketing PGMs and has a vertically
integrated operational structure - from mine to market. Lonmin's mining operations extract ore from which the
Process Division produces refined PGMs for delivery to customers. Underpinning the operations is the Shared Services
function which provides high quality levels of support and infrastructure across the operations.
For further information please visit our website: http://www.lonmin.com
3 months 3 months
to 31 Mar to 31 Mar
2013 2012
Tonnes mined Marikana Karee(1) kt 1 210 1 248
Westerns(1) kt 697 747
Middelkraal(1) kt 475 489
Easterns(1) kt 208 284
Underground kt 2 590 2 769
Opencast kt 133 78
Total kt 2 722 2 847
Pandora attributable(2) Underground kt 51 51
Lonmin Platinum Underground kt 2 641 2 819
Opencast kt 133 78
Total kt 2 773 2 898
% UG2 % 72.5% 71.3%
Tonnes milled(3) Marikana Underground kt 2 592 2 713
Opencast kt 121 162
Total kt 2 713 2 875
Pandora(4) Underground kt 120 100
Lonmin Platinum Underground kt 2 711 2 813
Head grade(5) g/t 4.62 4.46
Recovery rate(6) % 86.8% 85.7%
Opencast kt 121 162
Head grade(5) g/t 2.89 2.68
Recovery rate(6) % 85.8% 84.6%
Total kt 2 833 2 975
Head grade(5) g/t 4.54 4.36
Recovery rate(6) % 86.8% 85.6%
3 months 3 months
to 31 Mar to 31 Mar
2013 2012
Metals in Marikana Platinum oz 170 830 173 564
concentrate(7) Palladium oz 76 816 78 763
Gold oz 4 582 4 918
Rhodium oz 22 411 21 875
Ruthenium oz 34 691 33 674
Iridium oz 8 299 7 271
Total PGMs oz 317 628 320 065
Nickel(8) MT 900 973
Copper(8) MT 582 621
Pandora(4) Platinum oz 8 759 7 014
Palladium oz 3 985 3 238
Gold oz 66 53
Rhodium oz 1 378 1 080
Ruthenium oz 2 082 1 642
Iridium oz 403 270
Total PGMs oz 16 673 13 297
Nickel(8) MT 15 11
Copper(8) MT 8 6
Concentrate Platinum oz 973 594
purchases Palladium oz 302 226
Gold oz 3 2
Rhodium oz 95 75
Ruthenium oz 102 90
Iridium oz 42 29
Total PGMs oz 1 516 1 016
Nickel MT 0 0
Copper MT 0 0
Lonmin Platinum Platinum oz 180 562 181 172
Palladium oz 81 103 82 227
Gold oz 4 651 4 973
Rhodium oz 23 883 23 030
Ruthenium oz 36 874 35 406
Iridium oz 8 745 7 570
Total PGMs oz 335 817 334 378
Nickel(8) MT 915 984
Copper(8) MT 590 627
3 months 3 months
to 31 Mar to 31 Mar
2013 2012
Refined production Lonmin refined metal Platinum oz 189 356 172 089
production Palladium oz 85 339 77 683
Gold oz 5 489 4 873
Rhodium oz 29 496 31 723
Ruthenium oz 50 860 41 005
Iridium oz 4 252 7 385
Total PGMs oz 364 792 334 759
Toll refined metal Platinum oz 1 273 18 289
production Palladium oz 184 66
Gold oz 20 (2)
Rhodium oz 28 82
Ruthenium oz 3 728 1 979
Iridium oz 646 417
Total PGMs oz 5 879 20 831
Total refined PGMs Platinum oz 190 629 190 379
Palladium oz 85 523 77 749
Gold oz 5 509 4 871
Rhodium oz 29 524 31 805
Ruthenium oz 54 588 42 983
Iridium oz 4 898 7 803
Total PGMs oz 370 671 355 590
Base metals Nickel(9) MT 883 915
Copper(9) MT 563 533
3 months 3 months
to 31 Mar to 31 Mar
2013 - Act 2012 - Act
Sales Refined metal sales Platinum oz 217 800 225 539
Palladium oz 96 703 96 061
Gold oz 5 937 5 715
Rhodium oz 29 107 30 785
Ruthenium oz 47 356 53 227
Iridium oz 7 273 7 661
Total PGMs oz 404 176 418 988
Nickel(9) MT 995 1 002
Copper(9) MT 823 549
Chrome(9) MT 373 459 334 827
3 months 3 months
to 31 Mar to 31 Mar
2013 2012
Average prices Platinum $/oz 1 609 1 583
Palladium $/oz 734 673
Gold $/oz 1 537 1 676
Rhodium $/oz 1 197 1 410
Ruthenium $/oz 74 94
Iridium $/oz 998 1 041
$ basket excl. by-product revenue(10) $/oz 1 178 1 164
$ basket incl. by-product revenue(11) $/oz 1 244 1 228
R basket excl. by-product revenue(10) R/oz 10 527 9 010
R basket incl. by-product revenue(11) R/oz 11 109 9 466
Nickel(9) $/MT 14 106 16 718
Copper(9) $/MT 7 528 7 582
Chrome(9) $/MT 17 17
Exchange Average rate for period(12) R/$ 8.91 7.74
Rates Closing rate R/$ 9.22 7.65
Notes:
1 Karee includes the shafts K3, K4 (currently on care and maintenance), 1B and 4B. Westerns comprises Rowland, Newman
and ore purchases from W1. Middelkraal represents Hossy and Saffy. Easterns includes E1, E2 and E3.
2 Pandora attributable tonnes mined represents Lonmin's share (42.5%) of the total tonnes mined on the Pandora joint
venture.
3 Tonnes milled excludes slag milling.
4 Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in
downstream operating statistics.
5 Head grade is the grammes per tonne (5PGE + Au) value contained in the tonnes milled and fed into the concentrator from
the mines (excludes slag milled).
6 Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag).
7 Metals in concentrate include metal derived from slag processing and have been calculated at industry standard downstream
processing losses to present produced saleable ounces.
8 Corresponds to contained base metals in concentrate.
9 Nickel is produced and sold as nickel sulphate crystals or solution and the volumes shown correspond to contained metal.
Copper is produced as refined product but typically at LME grade C. Chrome is produced in the form of chromite concentrate
and volumes shown are in the form of chromite.
10 Basket price of PGMs is based on the revenue generated in Rand and Dollar from the actual PGMs (5PGE + Au) sold in the
period based on the appropriate Rand / Dollar exchange rate applicable for each sales transaction.
11 As per note 10 but including revenue from base metals.
12 Exchange rates are calculated using the market average daily closing rate over the course of the period.
Sponsor
J.P. Morgan Equities South Africa (Pty) Ltd
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