LON - Lonmin - Update on South African Power Situa
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")
29 January 2008
Update on South African Power Situation
On Friday 25 January 2008, Lonmin received a communication from Eskom confirming
they had declared force majeure and requesting that Lonmin reduce power
consumption at its operations to the minimum load. In order to ensure the
safety of our employees and to comply with Eskom's request, production from our
mining and concentrating operations was stopped from 10.00 am on Friday morning
with only critical safety systems remaining operational. Our smelting and
refining operations continued to operate on reduced power with a resultant drop
in throughput.
Following a meeting with key customers this morning, Eskom has confirmed the
following:
- that it will be lifting the current force majeure;
- we can increase power supply at our operations to a maximum of 80% of the
typical load profile with immediate effect;
- it is envisaged that power supply will increase to 90% of the typical load
later in the week;
- that it will guarantee at least four hours notice of any future load
shedding; and
- that it will take four weeks to fully stabilise the power supply network.
We are now in the process of restarting our mining and concentrating operations.
In total we estimate the production lost during this power related shutdown will
be around 15,000 saleable ounces of Platinum.
Given the reduced levels of concentrate in our stock pipeline and in order to
make optimal use of the reduced power supply in the short term we have brought
forward our planned maintenance shutdown of the number one furnace previously
scheduled for February. The furnace is now offline and is currently expected to
be down for three weeks. During this period we will run our Merensky furnace.
Going forward, Eskom has requested all customers to reduce their power
consumption by 10% of the typical load for the foreseeable future. In the light
of this we will be reviewing our operations to see how we can best maximise our
output under this power constraint. It will take time to fully assess the
future production implications of this power reduction.
PGMs are globally strategic metals for a number of crucial applications
worldwide. Given the importance of South Africa's role in the PGM market, the
security of power supply remains a strategic issue for the industry. We are
committed to improving our power efficiency and to working with Eskom and the
South African Government to ensure the power necessary to produce the PGMs
needed to meet growing global demand.
Enquiries:
Alex Shorland-Ball +44 (0)20 7201 6060
Vice President,
Investor Relations & Communications
Date: 30/01/2008 07:27:09 Produced by the JSE SENS Department.
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