Wrap Text
Fourth Quarter 2016 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
14 November 2016
Fourth Quarter 2016 Production Report
Lonmin Plc (“Lonmin” or “the Company”), one of the world’s largest primary platinum producers, today announces
its production results for the quarter ended 30 September 2016. Lonmin also publishes today, in a separate
announcement, its final results for the year ended 30 September 2016.
Safety
- Our safety strategy is centred on the belief that Zero Harm is achievable and important contributions are
required from all stakeholders to achieve it.
- The twelve month rolling LTIFR to 30 September improved by 8.1% to 4.97 per million man hours from 5.41 in
the prior year.
- K3 shaft achieved 6 million fatality free shifts.
- 4B shaft achieved 10 million fatality free shifts and won the JT Ryan Safety Award for the fourth consecutive
year.
- Saffy shaft achieved 3 million fatality free shifts on 13 April 2016;
- We remain focused on addressing the root causes of safety incidents, and ensuring that lessons learnt from each
incident are implemented into action plans and shared across operations.
- We have been encouraged that our collaboration with key stakeholders, including the Department of Mineral
Resources (DMR) and The Association of Mineworkers and Construction Union (AMCU), continues to yield
results, as we have experienced decreasing Section 54 stoppages in the quarter.
Mining Operations
The Marikana mining operations (including Pandora) produced 2.7 million tonnes during the quarter as planned, a
decrease of 10.1% or 298,000 tonnes on the prior year period, reflecting the planned decrease in production from
the Generation 1 shafts in line with our strategy to reduce high cost production in a low price environment.
Generation 2 shafts
Production from our core Generation 2 shafts (K3, Rowland, Saffy and 4B/1B) was 2.1 million tonnes, broadly flat on
the fourth quarter of 2015 production of 2.2 million tonnes and accounted for 80% of total tonnes mined,
emphasizing our continued focus on these core shafts. Productivity at our Generation 2 shafts at 6.1 square metres
per mining employee for the quarter improved by 1.6% on the fourth quarter of 2015. The improved productivity
and reduced Section 54 stoppages were offset by the decrease in tonnes from K3 shaft.
- Saffy shaft produced 547,000 tonnes, an increase of 10.6% on the fourth quarter of 2015 as this shaft is now
running at full production and continues to perform well.
- Rowland shaft produced 487,000 tonnes, an increase of 3.5% on the fourth quarter of 2015.
- 4B/1B shaft produced 397,000 tonnes, a decrease of 41,000 tonnes or 9.4% on the fourth quarter of 2015, as a
result of the planned closure of 1B shaft in October 2015. Excluding the 59,000 tonnes produced by 1B in the
fourth quarter of 2015, 4B production increased by 4.8%.
- K3 shaft produced 708,000 tonnes, a decrease of 8.4% on the fourth quarter of 2015. The decrease is due to the
slow build-up of stoping crews due to restructuring and geological challenges in the split reef area.
1
Generation 1 shafts
In line with the Group’s rationalisation of high cost ounces, production from our Generation 1 shafts (Hossy,
Newman, W1, E1, E2, E3 and Pandora (100%)) at 485,000 tonnes was 32.5% lower than the fourth quarter of 2015.
Some of these shafts are run by contractors, which provide better flexibility to retain or close them, depending on
their profit contribution to the Company.
The Merensky opencast operations, which produced 59,000 tonnes in the fourth quarter of 2015 ceased at the end
of the financial year 2015. Mining of the U12 UG2 pit commenced in July 2016 and produced 39,000 for the quarter,
but this is a very small resource and it is expected that mining will stop during the course of 2017.
Production Losses
Following ongoing and pro-active interactions with the Inspectorate of the DMR, and as shaft management develop
a better understanding and working relationship with the Inspectorate and with the Union, we are experiencing a
reduction in the duration and frequency of Section 54 stoppages and more localised application of the stoppages. A
total of some 95,000 tonnes of production was lost in the quarter due to Section 54 safety stoppages and
management induced safety stoppages compared to 297,000 tonnes in the fourth quarter of 2015.
Q4 2016 Q4 2015
Tonnes Tonnes
Section 54 safety stoppages 82,000 281,000
Management induced safety stoppages and other 13,000 16,000
Total tonnes lost 95,000 297,000
Process Operations
Milling production in the quarter of 2.8 million tonnes was affected by lower than planned ore availability from the
mining operations and was higher than tonnes mined of 2.7 million tonnes due to available above ground ore stocks,
but 5.3% lower than in the fourth quarter of 2015.
Underground milled head grade at 4.59 grammes per tonnes (5PGE+Au) increased by 2.6% when compared to the
4.47 grammes per tonne achieved in the fourth quarter of 2015 and the overall milled head grade was 4.59 grammes
per tonne, up 3.2% on the prior year period due to improved ore mix and also improved mining head grades.
Platinum production (Metals-in-Concentrate) was 182,612 ounces, which was 1.6% lower than the fourth quarter of
2015 notwithstanding the lower milled volumes of 5.3%, due to the higher mill head grade. The Metals-in-
Concentrate were only 2.6% lower than the fourth quarter of 2015 due to the higher grade and ore mix.
Concentrator recoveries in the quarter were 86.0%, marginally down from 86.4% in the fourth quarter of 2015, due
to the milling of opencast UG2 ore.
Total refined Platinum production at 219,493 ounces was 14.3% lower than the fourth quarter of 2015, due to the
release of built-up stock following the smelter outages but higher than the Metals-in-Concentrate of 182,612
Platinum ounces. Total PGMs produced were 424,613 ounces, a decrease of 14.2% on the fourth quarter of 2015,
but higher than the Metals-in-Concentrate of 345,630 ounces. Refined production benefited from the smelter clean-
up project, which released 36,881 Platinum ounces during the quarter. The smelter clean-up project is expected to
continue into the first half of the 2017 financial year.
The Other Precious Metals Plant, which was commissioned in the first half of 2016, increased the production of
Rhodium (released 7,021 ounces) and Iridium (released 5,318 ounces) due to a stock release arising from a reduction
in the time to recover metals.
Sales & Pricing
Platinum sales for the quarter were 211,140 ounces, a decrease of 16.8% compared with the fourth quarter of 2015,
when the refined production was extremely high due to the release of built-up stock following the smelter outages
2
during 2015. PGM sales were 390,743 ounces, down 18.9% on the comparatively high the fourth quarter of 2015
sales.
The US Dollar basket price (including base metal revenue) at $902 per ounce during the quarter was up 12.0% on the
fourth quarter of 2015 while the corresponding Rand basket price (R12,663 per ounce) was 22.5% higher than the
prior year period, benefiting from the Rand weakness. The average Rand to US Dollar exchange rate was 8.2%
weaker at 14.06 compared to 13.00 in the fourth quarter of 2015.
Net cash at the end of the quarter increased to $173 million and total liquidity improved to $537 million.
- ENDS –
ENQUIRIES
Investors / Analysts:
Lonmin
Tanya Chikanza (Head of Investor Relations) +27 11 218 8358 /+44 207 201 6007
Andrew Mari (Investor Relations Manager) +27 11 218 8420
Media:
Wendy Tlou +27 83 301 9663
Cardew Group +44 207 930 0777
Anthony Cardew / Emma Crawshaw
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 Igneous Complex in South Africa, where around 80% of known
global PGM resources are located.
The Company creates value through mining, refining and marketing PGMs and has a vertically integrated operational
structure - from mine to market. 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 12 months 12 months
to 30 Sep to 30 Sep to 30 Sep to 30 Sep
2016 2015 2016 2015
Tonnes Marikana K3 shaft kt 708 773 2,687 2,713
mined1 Rowland shaft kt 487 470 1,731 1,872
Saffy shaft kt 547 495 2,055 1,758
4B/1B shaft kt 397 380 1,588 1,409
Generation 2 kt 2,139 2,117 8,061 7,752
1B shaft Kt - 59 6 219
Hossy shaft kt 191 224 712 953
Newman shaft kt 56 174 346 765
W1 shaft kt 34 45 162 180
East 1 shaft kt 33 37 141 148
East 2 shaft kt 66 98 293 390
East 3 shaft kt 21 17 63 68
Pandora (100%)2 kt 83 124 471 544
Generation 1 kt 485 777 2,196 3,267
K4 shaft kt 0 8 0 49
Generation 3 Kt 0 8 0 49
Underground kt 2,624 2,902 10,256 11,067
Opencast kt 39 59 49 230
Lonmin (100%) Total tonnes
kt 2,663 2,961 10,305 11,297
mined (100%)
% mined from UG2
% 74.2% 74.1% 75.3% 75.1%
reef (100%)
Lonmin Underground &
kt 2,622 2,899 10,070 11,016
(attributable) opencast
Ounces Lonmin excl.
Platinum oz 165,894 175,734 627,245 668,319
mined3 Pandora
Pandora (100%) Platinum oz 5,852 8,178 32,509 36,458
Lonmin Platinum oz 171,746 183,912 659,754 704,776
Lonmin excl.
PGMs oz 314,538 336,257 1,200,244 1,280,964
Pandora
Pandora (100%) PGMs oz 11,539 16,087 63,857 71,861
Lonmin PGMs oz 326,077 352,344 1,264,101 1,352,825
Tonnes Marikana Underground kt 2,699 2,803 9,806 10,930
milled4 Opencast kt 39 53 98 318
Total kt 2,738 2,855 9,904 11,248
Pandora5 Underground kt 83 124 471 562
Lonmin Underground kt 2,783 2,926 10,277 11,491
Platinum Milled head grade6 g/t 4.59 4.47 4.60 4.51
Recovery rate7 % 86.3% 86.4% 86.7% 86.8%
Opencast kt 39 53 98 318
Milled head grade6 g/t 4.81 3.07 3.59 3.08
Recovery rate7 % 64.3% 84.8% 73.6% 85.1%
Total kt 2,821 2,979 10,375 11,810
Milled head grade6 g/t 4.59 4.45 4.59 4.47
Recovery rate7 % 86.0% 86.4% 86.6% 86.7%
4
3 months 3 months 12 months 12 months
to 30 Sep to 30 Sep to 30 Sep to 30 Sep
2016 2015 2016 2015
Metals-in- Marikana Platinum oz 174,936 176,123 631,066 696,489
concentrate10 Palladium oz 79,673 82,035 292,315 323,177
Gold oz 4,253 4,271 15,206 16,503
Rhodium oz 24,199 24,840 90,151 101,435
Ruthenium oz 39,908 41,033 147,740 165,689
Iridium oz 8,289 8,089 29,845 32,416
Total PGMs oz 331,259 336,391 1,206,322 1,335,710
Nickel9 MT 889 961 3,169 3,579
Copper9 MT 547 591 1,949 2,211
Pandora Platinum oz 5,852 8,178 32,509 37,553
Palladium oz 2,752 3,825 15,231 17,496
Gold oz 16 30 95 131
Rhodium oz 953 1,373 5,360 6,383
Ruthenium oz 1,616 2,255 8,852 10,466
Iridium oz 349 425 1,811 1,988
Total PGMs oz 11,539 16,087 63,857 74,019
Nickel9 MT 15 24 93 87
Copper9 MT 6 9 32 37
Concentrate Platinum oz 1,824 1,357 5,129 6,273
purchases Palladium oz 472 376 1,555 1,869
Gold oz 7 4 18 18
Rhodium oz 158 174 565 816
Ruthenium oz 299 240 919 1,079
Iridium oz 73 77 242 338
Total PGMs oz 2,833 2,228 8,429 10,394
Nickel9 MT 1 1 2 3
Copper9 MT 0 1 2 2
Lonmin Platinum Platinum oz 182,612 185,659 668,704 740,315
Palladium oz 82,897 86,236 309,101 342,542
Gold oz 4,275 4,305 15,319 16,653
Rhodium oz 25,310 26,386 96,076 108,634
Ruthenium oz 41,824 43,527 157,510 177,235
Iridium oz 8,712 8,592 31,898 34,743
Total PGMs oz 345,630 354,705 1,278,607 1,420,122
Nickel9 MT 905 985 3,265 3,669
Copper9 MT 552 600 1,983 2,250
5
3 months 3 months 12 months 12 months
to 30 Sep to 30 Sep to 30 Sep to 30 Sep
2016 2015 2016 2015
Refined Lonmin refined Platinum oz 21,9250 256,029 739,315 759,005
production metal production Palladium oz 96,783 118,022 334,470 350,040
Gold oz 5,483 5,934 19,596 18,232
Rhodium oz 32,294 40,156 121,149 102,372
Ruthenium oz 56,315 59,494 177,006 181,803
Iridium oz 14,011 14,977 44,855 32,180
Total PGMs oz 424,136 494,611 1,436,390 1,443,633
Toll refined metal Platinum oz 243 193 2,575 689
production Palladium oz 114 94 713 280
Gold oz 6 5 30 14
Rhodium oz 37 33 207 95
Ruthenium oz 58 68 698 2,093
Iridium oz 19 17 110 560
Total PGMs oz 477 411 4,333 3,731
Total refined Platinum oz 219,493 256,222 741,890 759,695
PGMs Palladium oz 96,897 118,116 335,183 350,320
Gold oz 5,489 5,939 19,626 18,246
Rhodium oz 32,331 40,190 121,356 102,467
Ruthenium oz 56,373 59,562 177,704 183,896
Iridium oz 14,030 14,994 44,965 32,740
Total PGMs oz 424,613 495,022 1,440,724 1,447,364
Base metals Nickel10 MT 1,096 1,163 3,769 3,720
Copper10 MT 696 780 2,227 2,276
Sales Refined metal Platinum oz 211,140 253,841 735,747 751,560
sales Palladium oz 94,440 114,949 334,319 347,942
Gold oz 5,890 7,589 20,735 19,199
Rhodium oz 32,322 34,962 121,604 92,520
Ruthenium oz 31,701 57,742 145,306 192,549
Iridium oz 15,250 12,894 47,392 30,114
Total PGMs oz 390,743 481,976 1,405,103 1,433,883
Nickel10 MT 1,249 1,380 3,773 3,656
Copper10 MT 624 945 2,265 2,131
Chrome10 MT 532,768 322,649 1,563,236 1,440,901
Average Platinum $/oz 1,084 979 978 1,095
prices Palladium $/oz 674 612 589 718
Gold $/oz 1,478 1,478 1,425 1,487
Rhodium $/oz 636 805 671 998
$ basket excl. by-product revenue11 $/oz 850 761 753 849
$ basket incl. by-product revenue12 $/oz 902 805 796 902
R basket excl. by-product revenue11 R/oz 11,933 9,765 11,030 10,207
R basket incl. by-product revenue12 R/oz 12,663 10,336 11,637 10,829
Nickel10 $/MT 8,027 8,292 7,357 10,512
Copper10 $/MT 4,468 4,971 4,508 5,584
Exchange Average rate for period13 R/$ 14.06 13.00 14.77 12.01
rates Closing rate R/$ 13.71 13.83 13.71 13.83
6
Notes:
1 Reporting of shafts are in line with our operating strategy for Generation 1 and Generation 2 shafts.
2 Pandora underground tonnes mined represents 100% of the total tonnes mined on the Pandora joint venture of which 42.5%
for October and November 2014 and 50% thereafter is attributable to Lonmin.
3 Limpopo underground tonnes mined represents low grade development tonnes mined whilst on care and maintenance.
4 Ounces mined have been calculated at achieved concentrator recoveries and with Lonmin standard downstream processing
recoveries to present produced saleable ounces.
5 Tonnes milled excludes slag milling.
6 Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in
downstream operating statistics.
7 Limpopo tonnes milled represents low grade development tonnes milled.
8 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).
9 Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag).
10 Metals-in-concentrate have been calculated at Lonmin standard downstream processing recoveries to present produced
saleable ounces.
11 Corresponds to contained base metals-in-concentrate.
12 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.
13 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.
14 As per note 13 but including revenue from base metals.
15 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
7
Date: 14/11/2016 09:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
