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Regulatory Release Third Quarter 2013 Production Report & Interim Management Statement
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 - Third Quarter 2013 Production Report & Interim Management Statement
Lonmin Plc (“Lonmin or the Company”), the world’s third largest Platinum producer, today announces its production results for
the three and nine months to 30 June 2013 and interim management statement (unaudited).
Overview
Our operational performance in the third quarter continued to exceed our renewal plan despite momentum in the mining
operations being hampered by an increase in Section 54 safety stoppages and intermittent labour disruptions that we saw start
to emerge during the second quarter of 2013. As a consequence, 2.9 million tonnes were mined in total during Q3 2013, down
3.6% on the prior year period but representing an increase of 4.1 % on Q2 2013.
During the quarter, we produced total Platinum metal in concentrate of 186,456 ounces. Platinum sales, at 81,382 ounces, were
impacted by the smelter capacity constraints following the incident at the Number Two furnace and the planned shutdown of
the Number One furnace. For the nine months to 30 June 2013, we produced 552,515 ounces of Platinum metal in concentrate
and achieved Platinum sales of 407,523 ounces.
On 1 July 2013 we announced that repairs to the Number Two furnace had been completed as planned and that both the
Number One and Number Two furnaces had successful matte taps after their re-builds and are currently operating normally.
The cumulative results for the nine months to 30 June 2013, together with the successful re-start of the furnaces, give us
confidence to maintain our Platinum metal in concentrate guidance in excess of 700,000 ounces and Platinum sales of 660,000
ounces.
The positive trend of our rolling average Lost Time Injury Frequency Rate (LTIFR) continued and LTIFR for the quarter was 3.55
incidents per million man hours compared to 3.66 for Q2 2013 and 4.47 for Q3 2012.
Mining Division
Our underground mining operations produced 2.8 million tonnes during the third quarter, a decrease of 3.6% from the prior
year period. This was due to the production losses experienced as a result of Section 54 safety stoppages at our Karee and
Westerns operations as well as intermittent labour disruptions across our portfolio of shafts in the period under review.
Production at Karee decreased by 85,000 tonnes down 6.7% on the prior year period as a Section 54 safety stoppage halted
drilling and blasting operations at K3 following the fatal accident in the Merensky section on 26 April. The losses were also
compounded by labour disruptions and slightly increased levels of absenteeism amongst the workforce. Production at Karee was
also impacted by K4, which contributed 48,000 tonnes in the prior year period, being idle as it was placed on care and
maintenance.
Similarly production at Westerns decreased by 66,000 tonnes or 8.8% on the prior year period. This was as a result of Section 54
safety stoppages, labour disruptions as well as the ore reserve and infrastructure challenges we highlighted in the last quarter
negatively impacting momentum at Rowland. Newman continued with its planned depletion, although output was further
negatively impacted by adverse ground conditions.
Production at Middelkraal continued to increase, up 91,000 tonnes or 18.5% on the prior year, mostly as a result of continued
improvement at Saffy and ramp up in stope crew efficiency. This was in spite of challenges experienced with poor ground
conditions and infrastructure constraints related to the remaining mechanised mining legacy issues. Hossy’s production also
showed some improvement despite the continued challenges faced with the lower than expected efficiency of the extra low
profile suite of mining equipment. Production at Easterns decreased by 50,000 tonnes or 17.1% on the back of sporadic labour
disruptions, increased levels of absenteeism and the planned depletion of East 1 shaft as it approaches the end of its life.
1
Production from our Merensky opencast operations decreased by 5.0% on the prior year period. Pandora attributable
production increased by 8,000 tonnes or 14.2% on the prior year period.
In total, 234,000 tonnes of production was lost during the quarter, of which 112,000 tonnes was as a result of Section 54 safety
stoppages and an additional 123,000 tonnes was due to labour stoppages. This compared to a total of 81,000 tonnes lost in the
prior year period of which 40,000 was due to Section 54 safety stoppages.
Process Division
Total tonnes milled in the quarter fell by 161,000 tonnes or 5.1% to 3.0 million tonnes with underground and opencast, 5.2% and
2.7% respectively, lower than the prior year period.
Underground milled head grade decreased by 0.04 grammes per tonne to 4.60 grammes per tonne (5PGE+Au) when compared
to 4.63 grammes per tonne in the prior year period. The overall milled head grade was 4.54 grammes per tonne, a decrease of
1% on the prior year period.
Underground and overall concentrator recoveries for the quarter decreased by 0.4 percentage points to 86.6% when compared
to the prior year and 0.2 percentage points respectively versus Q2 2013. The stoppages at our Easterns concentrators EPL and
EPC constrained the performance of our Easterns Tailings Treatment plants and were a key contributor in the decrease in
recoveries in the period under review.
Platinum in concentrate from the Marikana operations for the quarter was 174,598 saleable ounces, a 9% decrease on the prior
year period, whilst total Platinum in concentrate at 186,456 ounces was 8.1% lower than the prior year period. The decreases
were a consequence of the adverse impact of ore shortages experienced as a result of labour disruptions. This was achieved
whilst running with 7 out of 8 concentrators while Number One UG2 plant is being upgraded.
Total refined production for the third quarter was down 40.5% to 111,173 ounces of saleable Platinum when compared against
the prior year period. Total Platinum Group Metals (“PGMs”) produced in the third quarter were 222,715 ounces, a decrease of
36.7% on the prior year period. This was impacted on by the downtime on the furnaces.
Sales & Pricing
Platinum sales for the quarter were down 45.9% to 81,382 ounces and PGM sales were down 34.5% to 195,999 ounces. The
lower sales in the period were due to the incident at the Number Two furnace and the initial planned shutdown of the Number
One furnace that are now back to full operation. The US dollar basket price (excluding base metal credit) at $976 per ounce
during the quarter was 5.9% less than the prior year period while the corresponding ZAR basket price was 8.8% higher than the
prior quarter on the back of ZAR weakness.
Nine Month Production
Total tonnes mined during the first nine months of the 2013 financial year were 8.6 million tonnes, a decrease of 215,000 tonnes
from 2012, due in part to mining momentum being tempered by the incidence of Section 54 safety stoppages during the period,
as well as intermittent work stoppages due to labour disruptions. During the nine month period we mined 8.0 million tonnes
from the Marikana underground operations, a decrease of 3.8% when compared against the same period in 2012. The impact of
Section 54 stoppages and labour disruptions has been a loss of around 454,000 tonnes compared to 545,000 tonnes for the
same period in 2012.
Total tonnes milled during the nine months of the 2013 financial year decreased by 4.9% to 8.7 million tonnes when compared
to the prior year period. This reflects the anticipated ramp up experienced after the strike in October 2012 along with the low
ore supplies seen at the start of the financial year. The total milled head grade improved to 4.56 grammes per tonne or 1.8%
higher than the prior year period.
Underground and overall recoveries improved in the nine month period to 86.8% and 86.7% respectively when compared to
86.0% for both in the prior year period.
Platinum in concentrate decreased by 3.2% or 18,511 ounces to 552,515 saleable ounces of Platinum in the nine months under
review, due to lower mined production and the Number One shaft concentrator being off line in the nine months under review.
2
Total refined production in the nine month period was 437,257 Platinum ounces and 842,997 PGM ounces, a decrease of 11.0%
and 11.6% respectively compared to the prior year period.
Sales for the nine month period were 13.1% lower at 407,523 ounces of Platinum and 782,752 PGM ounces were down 13.8%
on the comparable prior year period.
The US dollar basket price (excluding base metal credit) at $1,127 during the nine months of the 2013 financial year was 1%
higher than the prior year period. The corresponding ZAR basket price excluding base metal revenue was 13.9% higher than in
the prior year period at R10, 113 per ounce.
Outlook and Guidance
Although our operations continue to exceed our Renewal Plan we remain alert to the risks to production associated with safety
stoppages and the uncertain labour relations landscape. We maintain our Platinum metals in concentrate guidance of in excess
of 700,000 ounces and our sales guidance of 660,000 ounces. Unit cost guidance remains below 8% and capex guidance of
US$175 million is maintained.
- ENDS -
ENQUIRIES
Investors / Analysts:
Lonmin
Tanya Chikanza (Head of Investor Relations) +27 11 218 8358 /
+44 20 7201 6007
Media:
Cardew Group
Anthony Cardew / James Clark +44 20 7930 0777
Sue Vey +27 72 644 9777
Brunswick – Johannesburg
Itumeleng Mahabane / +27 11 502 7400 /
Tim Schultz +27 82 309 2496
25 July 2013
Sponsor: J.P Morgan Equities South Africa (Pty) Ltd
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
3 months 3 months 9 months 9 months
to 30 June to 30 June to 30 June to 30 June
2013 2012 2013 2012
Tonnes Marikana Karee 1
kt 1 187 1 271 3 610 3 731
mined 1
Westerns kt 689 755 2 105 2 264
1
Middelkraal kt 579 489 1 596 1 453
1
Easterns kt 241 291 668 847
Underground kt 2 696 2 806 7 980 8 295
Opencast kt 127 133 414 330
Total kt 2 823 2 939 8 394 8 624
Pandora
Underground kt 63 55 175 160
attributable2
Lonmin Platinum Underground kt 2 759 2 861 8 154 8 454
Opencast kt 127 133 414 330
Total kt 2 886 2 995 8 569 8 784
% UG2 % 73.9% 70.9% 73.0% 71.0%
^ ^ ^ ^
Tonnes Marikana Underground kt 2 706 2 879 7 944 8 412
milled3
Opencast kt 106 109 319 348
Total kt 2 812 2 988 8 263 8 760
Pandora4 Underground kt 149 133 414 359
Lonmin Platinum Underground kt 2 854 3 012 8 358 8 771
5
Head grade g/t 4.60 4.63 4.62 4.53
6
Recovery rate % 86.6% 87.0% 86.8% 86.0%
Opencast kt 106 109 319 348
5
Head grade g/t 2.91 3.24 2.92 3.00
6
Recovery rate % 85.4% 86.9% 85.4% 85.6%
Total kt 2 961 3 121 8 677 9 120
Head grade5 g/t 4.54 4.58 4.56 4.47
6
Recovery rate % 86.6% 87.0% 86.7% 86.0%
4
3 months 3 months 9 months 9 months
to 30 June to 30 June to 30 June to 30 June
2013 2012 2013 2012
Metals in Marikana Platinum oz 174 598 191 877 519 681 543 572
concentrate7
Palladium oz 80 588 87 920 236 676 247 724
Gold oz 4 346 4 613 13 165 14 195
Rhodium oz 24 085 25 541 69 592 69 879
Ruthenium oz 35 843 36 714 105 975 105 738
Iridium oz 8 134 7 912 24 258 22 921
Total PGMs oz 327 593 354 577 969 347 1 004 029
8
Nickel MT 944 948 2 700 2 886
8
Copper MT 562 602 1 691 1 847
Pandora4 Platinum oz 10 808 9 949 29 904 25 557
Palladium oz 5 089 4 661 13 845 11 893
Gold oz 86 72 229 190
Rhodium oz 1 758 1 575 4 751 3 965
Ruthenium oz 2 559 2 252 7 097 5 907
Iridium oz 457 373 1 294 988
Total PGMs oz 20 759 18 883 57 119 48 501
8
Nickel MT 38 15 70 38
8
Copper MT 10 8 29 20
Concentrate Platinum oz 1 050 1 025 2 930 1 897
purchases Palladium oz 312 334 860 644
Gold oz 4 3 10 6
Rhodium oz 127 122 313 226
Ruthenium oz 126 144 323 271
Iridium oz 48 47 127 90
Total PGMs oz 1 666 1 676 4 562 3 134
Nickel MT 0 0 1 1
Copper MT 0 0 1 1
Lonmin Platinum Platinum oz 186 456 202 851 552 515 571 026
Palladium oz 85 989 92 915 251 381 260 262
Gold oz 4 436 4 688 13 404 14 391
Rhodium oz 25 970 27 239 74 656 74 070
Ruthenium oz 38 528 39 111 113 394 111 916
Iridium oz 8 639 8 333 25 679 24 000
Total PGMs oz 350 018 375 136 1 031 029 1 055 664
8
Nickel MT 983 963 2 772 2 926
8
Copper MT 573 610 1 721 1 868
5
3 months 3 months 9 months 9 months
to 30 June to 30 June to 30 June to 30 June
2013 2012 2013 2012
Refined Lonmin refined Platinum oz 111 173 185 946 435 893 470 255
production metal production
Palladium oz 50 973 84 199 196 937 220 701
Gold oz 2 546 4 856 11 595 13 392
Rhodium oz 21 727 15 040 57 473 66 799
Ruthenium oz 26 884 41 749 109 070 114 718
Iridium oz 8 928 7 663 21 782 24 369
Total PGMs oz 222 230 339 453 832 749 910 235
Toll refined Platinum oz - 918 1 364 20 937
metal production
Palladium oz 350 8 290 662 12 479
Gold oz 15 481 286 681
Rhodium oz 120 2 793 1 837 4 455
Ruthenium oz - - 5 185 3 682
Iridium oz - - 913 1 006
Total PGMs oz 485 12 482 10 247 43 241
Total refined PGMs Platinum oz 111 173 186 864 437 257 491 193
Palladium oz 51 323 92 489 197 599 233 180
Gold oz 2 561 5 337 11 882 14 074
Rhodium oz 21 847 17 833 59 310 71 254
Ruthenium oz 26 884 41 749 114 256 118 401
Iridium oz 8 928 7 663 22 694 25 374
Total PGMs oz 222 715 351 935 842 997 953 475
Base metals Nickel9 MT 658 1 220 2 309 2 865
9
Copper MT 362 723 1 392 1 623
Sales Refined metal Platinum oz 81 382 150 376 407 523 468 777
sales
Palladium oz 49 304 79 200 190 079 214 753
Gold oz 4 200 4 707 12 537 14 040
Rhodium oz 19 048 16 500 52 517 65 520
Ruthenium oz 33 238 40 953 99 655 118 864
Iridium oz 8 827 7 557 20 441 25 916
Total PGMs oz 195 999 299 292 782 752 907 871
9
Nickel MT 652 976 2 339 2 769
9
Copper MT 262 603 1 285 1 473
9
Chrome MT 359 391 326 446 1 010 401 922 478
6
3 months 3 months 9 months 9 months
to 30 June to 30 June to 30 June to 30 June
2013 2012 2013 2012
Average Platinum $/oz 1 450 1 468 1 568 1 536
prices13
Palladium $/oz 716 622 713 646
Gold $/oz 1 510 1 518 1 523 1 624
Rhodium $/oz 1 083 1 265 1 155 1 412
Ruthenium $/oz 77 108 76 105
Iridium $/oz 968 1 058 989 1 046
10
$ basket excl. by-product revenue $/oz 976 1 037 1 127 1 116
11
$ basket incl. by-product revenue $/oz 1 067 1 121 1 206 1 195
10
R basket excl. by-product revenue R/oz 9 224 8 481 10 113 8 876
11
R basket incl. by-product revenue R/oz 10 033 9 057 10 788 9 447
9
Nickel $/MT 12 042 13 815 13 587 15 286
9
Copper $/MT 6 634 7 345 7 301 7 325
9
Chrome $/MT 22 22 20 19
Exchange
Average rate for period12 R/$ 9.44 8.12 9.01 7.98
Rates
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.
13 The 9 months commodity prices in respect of the prior year have been corrected as an error was identified in the prior year publication.
In respect to the 3 months prior year period, Dollar basket price including by product revenue has been corrected. The impact of all the
corrections is however minor.
7
Date: 25/07/2013 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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