Lonmin’s furnace woes curb output

[miningmx.com] — PLATINUM producer Lonmin said on Thursday the unending problems with its Number One furnace may be drawing to a close, but not before the company’s Achilles Heel once more placed a curb on operations.

In a quarterly production report to end-December, Lonmin said the rebuild and modification of the furnace was successfully completed, with the facility being recommissioned in mid-December.

The furnace was taken down at the end of October for a scheduled rebuild.

As a result of the outage, refined production and platinum sales were down 26% (at 81,982 ounces) and 39.1% (66,426 oz) respectively compared to the previous year.

Lonmin’s stated target for platinum sales in 2011 is 750,000 oz.

Total platinum group metal sales fell by 23.1% to 184,317 oz.

In 2010 the Number One furnace was down for almost 14 weeks due to scheduled maintenance and as a result of a double run-out experienced in March and May.

In the group’s most recent annual report, CEO Ian Farmer said he was cautiously optimistic the frequent breakdown of the furnace may be coming to an end.

“We recognise and share the concerns of our investors about the reliability of this vessel, but I believe we have a team who understand the issues very well,’ Farmer said. “We continue to make modifications to the furnace designed to reduce disruptions risk and this gives us confidence, tempered with realism, for the future.

“While any disruption to the Number One furnace is always disappointing, the value impact of such an event is not material to the long-term value of Lonmin.’

Lonmin previously announced it was adding more backup capacity by building a new 10MW pyromet furnace, planned to come into production in the second half of 2012 at a cost of about R350m.


Total tonnes mined during the period from Lonmin’s Marikana underground operations were 2.8 million, up 200,000 tonnes and representing a 7.8% increase from the previous year.

The Karee, Middelkraal and the Easterns’ mining units all posted significant production increases, but these were offset by a 113,000 tonnes fall at Westerns.

Production at Lonmin’s open cast operations continued to ramp up and reached 193,000 tonnes, with Pandora delivering 39,000 tonnes.

Overall, total tonnes mined were 15% up at 3 million tonnes. Similarly, tonnes milled increased by 17.4% to 3 million tonnes.

Lonmin also reported an increase in the production of metals in concentrate due to improvements in recovery rates. Underground concentrator recoveries increased from 84.5% to 85.1%, while open cast recoveries improved from 42.3% to 80.7%.

Shares in Lonmin were up 1.31% at R195.92 in Thursday late afternoon trade.