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Fourth Quarter 2014 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
10 November 2014
Fourth Quarter 2014 Production Report
Lonmin Plc (“Lonmin” or “the Company”), the world’s third largest Platinum producer, today
announces its production results for the three months to 30 September 2014. Lonmin also, publishes
today, in a separate announcement, its final results for the year ended 30 September 2014.
Overview
The rolling average Lost Time Injury Frequency Rate (LTIFR) for the 12 months to 30 September 2014
improved to 3.34 incidents per million man hours compared to 3.50 at 30 September 2013 and
reflects the reduced hours of work as a result of the strike.
Ramp up excellence
As announced on 8 October, Lonmin successfully achieved ramp up to full production earlier than
anticipated during August 2014.
Our successful ramp up was accelerated by earlier and stronger levels of employee attendance than
had been previously expected, a well-executed care and maintenance strategy during the strike
period as well as thorough planning and well controlled execution of the ramp up process. This
resulted, in a rapid, safe and efficient ramp up of our operations and plants. Excellent attendance
levels continued and Lonmin has experienced strong performance across all operations, to achieve
an impressive performance in the quarter, with 2.8 million tonnes being mined. Whilst this
represents a decline of 0.5 million tonnes on the prior year period when production was normal,
tonnes mined in August and September 2014 exceeded those mined in the same period in 2013.
In what has been a challenging year given the prolonged strike, we were able to achieve a milestone:
one year without a fatal accident. Our safety record showed another year on year improvement,
with our LTIFR decreasing by 4.6%. This is particularly pleasing as it takes into account the impact of
the strike, given the heightened safety risk when operations resume after a standstill.
Mining Division
Our Marikana underground mining operations produced 2.5 million tonnes during the fourth
quarter, a decline of 0.5 million tonnes or 15.3% less than the prior year period. Pandora production
was 127,000 tonnes, a decrease of 33,000 on the prior year period.
Production at Karee was down at 0.3 million tonnes, a 19.4% decline on the prior year period.
Similarly, production at Westerns declined by 0.2 million tonnes, a 16.0% drop against prior year
period. Production output from Rowland shaft decreased by 10.1% compared to prior year period,
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and a 23.2% decline was realised from Newman, representing a decrease of 56,000 tonnes. Output
from Hossy was only marginally down by 3.1% when compared to the prior year period.
At Easterns production was in-line with the prior year period, down only 1.2% as the decrease in
volumes from East 2 and East 3 was off-set by increased production output from Saffy shaft where
our focus and commitment is bearing fruit. Saffy produced 48,000 tonnes more than the prior year
period, representing a 16.0% increase to the comparable period, despite the strike. Good
momentum has been achieved during the ramp up with Saffy achieving its best ever monthly output
of just under 163,000 tonnes in September.
A total of 830,000 tonnes of production were lost during the quarter, (compared to 165,000 tonnes
in the prior year period) of which 679,000 tonnes were due to the strike action, 91,000 tonnes
related to Section 54 safety stoppages, and 60,000 tonnes to Management Induced Safety
Stoppages (MISS).
Process Division
Total tonnes milled in the quarter decreased by 0.8 million or 25.4% to 2.3 million tonnes with
underground 27.4% lower than the prior year period and opencast up by 57.5% as it was largely
unaffected by the industrial action.
Underground milled head grade decreased by 4.0% to 4.37 grammes per tonne (% 5PGE + Au) when
compared to 4.55 grammes per tonne in the prior year period and is directly attributable to the ore
mix milled which was dictated by the strike. This remains within our expected range. The overall
milled head grade was 4.31 grammes per tonne, a decrease of 4.5% on the prior year period partly
due to the increase of lower grade opencast ore milled.
Underground and overall concentrator recoveries for the quarter decreased by 1.3 and 1.4
percentage points to 86.3% and 86.2% respectively when compared to prior year period.
Platinum in concentrate for the quarter was 141,624 saleable ounces, a 28.6% decrease on the prior
year period.
Total refined production for the quarter at 142,712 ounces of saleable Platinum, was down 47.5%
when compared against the prior year period whilst Platinum Group Metals (PGMs) produced in the
quarter were 256,400, a decrease of 48.0% on the prior year period. The fourth quarter of 2013
included the processing of a build-up of pipeline stock during the third quarter in 2013 following
downtime on the furnaces.
Sales & Pricing
Platinum sales for the quarter were down 47.2% to 152,270 ounces and PGM sales were down by
47.4% to 272,983 ounces. The US dollar basket price (including base metal credit) at $1,148 per
ounce during the quarter was 3.5% higher than the prior year period. The corresponding Rand
basket price including base metal credit increased by 10.2% compared to the prior year period on
the back of a weaker rand.
- ENDS -
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ENQUIRIES
Investors / Analysts:
Lonmin
Tanya Chikanza +27 11 218 8300 / +44 20 7201 6007
Floyd Sibandze +27 11 218 8300
Media:
Cardew Group
Anthony Cardew / James Clark +44 20 7930 0777
Sue Vey +27 72 644 9777
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 producing assets are situated in the Bushveld Igneous 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
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3 months 3 months
to 30 Sep to 30 Sep
2014 2013
Tonnes mined Marikana K3 shaft kt 677 851
4B/1B shaft kt 403 489
Karee kt 1 081 1 340
Rowland shaft kt 450 500
Newman shaft kt 187 244
Hossy shaft kt 297 306
W1 shaft Kt 34 50
1
East 1 shaft kt 32 90
Westerns kt 1 000 1 190
Saffy shaft kt 347 299
East 2 shaft kt 87 128
East 3 shaft Kt 11 24
Easterns kt 445 450
Underground kt 2 525 2 980
Opencast kt 100 113
Total kt 2 625 3 093
2
Pandora (100%) Underground kt 127 160
Lonmin (100%) Total tonnes mined (100%) kt 2 752 3 253
% tonnes mined from UG2
reef (100%) % 74.1% 74.4%
Lonmin (attributable) Underground & Opencast kt 2 679 3 161
Ounces Lonmin excluding
3 Pt ounces oz 157 331 192 277
mined Pandora
Pandora (100%) Pt ounces oz 8 231 11 239
Lonmin Pt ounces oz 165 562 203 516
Lonmin excluding Pandora PGM ounces oz 298 167 361 485
Pandora (100%) PGM ounces oz 16 262 21 647
Lonmin PGM ounces oz 314 430 383 132
Tonnes Marikana Underground kt 2 120 2 911
4
milled Opencast kt 117 74
Total kt 2 237 2 985
5
Pandora Underground kt 109 160
Lonmin Platinum Underground kt 2 228 3 071
6
Head grade g/t 4.37 4.55
7
Recovery rate % 86.3% 87.6%
Opencast kt 117 74
6
Head grade g/t 3.16 2.93
7
Recovery rate % 85.3% 85.0%
Total kt 2 345 3 145
6
Head grade g/t 4.31 4.51
7
Recovery rate % 86.2% 87.6%
4
3 months 3 months
to 30 Sep to 30 Sep
2014 2013
Metals- in- Marikana Platinum oz 133 507 186 332
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concentrate Palladium oz 61 875 86 945
Gold oz 4 062 4 499
Rhodium oz 18 578 25 648
Ruthenium oz 30 724 38 329
Iridium oz 5 663 8 801
Total PGMs oz 254 410 350 554
9
Nickel MT 790 950
9
Copper MT 485 607
Pandora Platinum oz 7 056 11 213
Palladium oz 3 361 5 345
Gold oz (23) 86
Rhodium oz 1 217 1 812
Ruthenium oz 1 959 2 667
Iridium oz 388 479
Total PGMs oz 13 958 21 602
9
Nickel MT 14 21
9
Copper MT 8 12
Concentrate purchases Platinum oz 1 060 883
Palladium oz 301 272
Gold oz (1) 5
Rhodium oz 126 109
Ruthenium oz 122 105
Iridium oz 48 45
Total PGMs oz 1 655 1 418
9
Nickel MT 0 1
9
Copper MT 0 1
Lonmin Platinum Platinum oz 141 624 198 428
Palladium oz 65 537 92 562
Gold oz 4 038 4 589
Rhodium oz 19 921 27 569
Ruthenium oz 32 805 41 101
Iridium oz 6 099 9 325
Total PGMs oz 270 023 373 574
9
Nickel MT 804 972
9
Copper MT 493 619
5
3 months 3 months
to 30 Sep to 30 Sep
2014 2013
Refined Lonmin refined metal Platinum oz 140 698 271 773
production production Palladium oz 65 164 122 904
Gold oz 4 438 7 081
Rhodium oz 7 136 21 651
Ruthenium oz 35 455 61 982
Iridium oz 1 001 6 286
Total PGMs oz 253 892 491 677
Toll refined metal Platinum oz 2 014 -
production Palladium oz 242 -
Gold oz 15 -
Rhodium oz 207 -
Ruthenium oz - 1 333
Iridium oz 30 100
Total PGMs oz 2 508 1 433
Total refined PGMs Platinum oz 142 712 271 773
Palladium oz 65 406 122 904
Gold oz 4 453 7 081
Rhodium oz 7 342 21 651
Ruthenium oz 35 455 63 315
Iridium oz 1 031 6 386
Total PGMs oz 256 400 493 110
Base metals 10
Nickel MT 858 1 224
10
Copper MT 609 776
Sales Refined metal sales Platinum oz 152 270 288 280
Palladium oz 65 049 122 951
Gold oz 6 600 5 885
Rhodium oz 8 100 25 108
Ruthenium oz 38 604 68 611
Iridium oz 2 360 8 387
Total PGMs oz 272 983 519 222
10
Nickel MT 839 1 246
10
Copper MT 643 845
10
Chrome MT 242 779 378 361
6
3 months 3 months
to 30 Sep to 30 Sep
2014 2013
Average prices Platinum $/oz 1 400 1 443
Palladium $/oz 851 718
Gold $/oz 1 508 1 475
Rhodium $/oz 1 283 975
Ruthenium $/oz 58 70
Iridium $/oz 610 841
11
$ basket excl. by-product revenue $/oz 1 072 1 058
11
R basket excl. by-product revenue R/oz 11 375 10 556
10
Nickel $/MT 15 284 11 242
10
Copper $/MT 6 710 6 827
10
Chrome $/MT 16 18
12
$ basket incl. by-product revenue $/oz 1 148 1 110
12
R basket incl. by-product revenue R/oz 12 196 11 070
13
Exchange rates Average rate for period R/$ 10.76 9.95
Closing rate R/$ 11.29 9.99
Notes:
1. East 1 shaft is now reported under Westerns in-line with changes in management structure. Prior
years have been adjusted accordingly.
2. Pandora underground tonnes mined represents 100% of the total tonnes mined on the Pandora joint
venture of which 42.5% is attributable to Lonmin.
3. Ounces mined have been calculated at achieved concentrator recoveries and as from 2014 with
Lonmin standard downstream processing recoveries to present produced saleable ounces.
4. Tonnes milled exclude slag milling.
5. Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing
which is included in downstream operating statistics.
6. 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).
7. Recovery rate in the concentrators is the total content produced divided by the total content milled
(excluding slag).
8. As from 2014, metals-in-concentrate are calculated at Lonmin standard downstream processing
recoveries to present produced saleable ounces.
9. Corresponds to contained base metals in concentrate.
10. 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.
11. 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.
12. As per note 11 but including revenue from base metals.
13. Exchange rates are calculated using the market average daily closing rate over the course of the
period.
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