[miningmx.com] – BEN Magara, CEO of Lonmin, warned an extended strike at the UK-listed firm’s Rustenburg premises would knock its ability to meet full-year production targets, and hit its cost control ambitions.
In better news, however, he said Lonmin had successfully converted its Pandora mining operations to new order mining rights which would provide security of tenure for the next 30 years.
Commenting in the firm’s first quarter production report, in which refined production increased 45% to 196,249 saleable platinum ounces year-on-year, Magara also said the company was in discussions with the Bapo ba Mogale tribe.
The discussions were aimed at converting the tribe’s royalty and their share in the Pandora operations into Lonmin equity. “We plan to bring the detailed proposals in this regard to shareholders later in the year once our discussions with the various stakeholders involved are sufficiently advanced,” he said.
The company was also making progress on its empowerment plans which must be complete by December 31.
“We intend doing this through share ownership schemes and through consultation with our employees and communities on the details of the schemes,” said Magara.
He warned that continued strike action at Lonmin’s operations by members of the Association of Mineworkers & Construction Union (AMCU) might dent the company’s ability to meet its year-end targets.
Lonmin guided for full-year sales of 750,000 platinum ounces and capital expenditure of $210m while unit cost production would increase at less than the rate of inflation.
“This was despite lower than expected mining output in quarter one which has resulted in lower ore stock piles ahead of the concentrators,” said Magara.
“However, due to the ongoing strike we will reassess our guidance and update the market in due course.
“All of our mining operations are at Marikana and therefore all are impacted by the strike. Losses are expected to be in the region of 3,100 mined Platinum ounces per working day during the strike,” he said.
