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LON
LOLMI
LON - Lonmin Plc - Q2 2012 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")
14 May 2012
Lonmin Plc
Q2 2012 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 31
March 2012 (unaudited).
Overview
We made solid progress in our mining operational performance, with total
tonnes mined flat at 2.9 million tonnes. This was achieved in spite of the
continued impact of Section 54 notifications from the Department of Mineral
Resources (DMR), which resulted in 170,000 tonnes of lost production. Our
total Platinum metal in concentrate increased by 3.9% compared to the prior
year period. The Refined Platinum production was however temporarily
affected by a smelting stock build up due to an increase in sulphur in the
feed to the Smelter. This occurred as a result of a greater percentage of
Merensky ore being milled due to a series of Section 54 and internal safety
stoppages that predominantly impacted our UG2 production. The Smelter is
expected to operate at its normal levels in the third quarter as the ore mix
returns to normal levels. The rate of stoppages reduced towards the end of
the quarter as the benefits of dialogue around Section 54s with the DMR
started to come through.
Our Lost Time Injury Frequency Rate (LTIFR) for the quarter was 4.69
incidents per million man hours versus 4.67 for Q1 2012.
Mining Division
Total tonnes mined in the second quarter of 2012 from our Marikana
underground operations were 2.8 million, an increase of 66,000 tonnes or
2.4% from the prior year period. This increase was in spite of the continued
frequency and wide range of Section 54 safety reviews and stoppages that we
experienced across all operations in the early part of the second quarter.
Production at the Karee operations increased by 141,000, representing a
12.7% increase from the prior year period, whilst Middelkraal`s production
was up 52,000 tonnes or 11.9%. This increase was offset by the continued
decrease in production at Westerns of 106,000 tonnes or 12.5% on the prior
year as the planned decline at Newman continues. Production at Easterns
decreased by 21,000 tonnes or 6.8% when compared against the prior year,
mainly due to community unrest and the consequent effect on our labour
force.
Production at our Merensky opencast operations in the period was 78,000
tonnes, a decrease of 65,000 tonnes when compared to the prior year period.
This reflects the continued production slowdown that commenced in the first
quarter as we focus on grade improvement. The production from Pandora
increased by 7,000 tonnes to 51,000 tonnes.
The total impact of the Section 54 shut downs was 170,000 tonnes in lost
production across all operations, including joint ventures, of which 100,000
tonnes were lost in January 2012. The total lost production compares to
48,000 tonnes lost in the prior year period. An additional 31,000 tonnes of
production was lost as a result of management induced safety stoppages and
39,000 tonnes of production was lost as a result of community and labour
unrest at Easterns. A summary of the direct impact on production of Section
54 stoppages is detailed below.
Division Section 54 stoppages
production impact
tonnes
Karee 54,000
Westerns 45,000
Middelkraal 60,000
Easterns Nil
Opencast and JV 11,000
Total 170,000
Process Division
Total tonnes milled in the quarter were marginally up at 3.0 million, a 0.8%
increase from the prior year. Underground tonnes milled increased by 177,000
tonnes, or 6.7%, to 2.8 million tonnes, but this was largely offset by the
154,000 tonnes reduction in opencast tonnes milled.
Underground milled head grade was 4.46 grammes per tonne (5PGE+Au) down 0.11
grammes per tonne or 2.4% compared to the prior year period, as the
proportion of Merensky mined continues to gradually increase. The overall
milled head grade was 4.36 grammes per tonne, an improvement of 1.1% when
compared to the prior year period. This was due to a lower proportion of
higher grade opencast ore when compared to the prior year. The total head
grade showed a decline of 2.5% from 4.47 grammes per tonne in the previous
quarter as a result of the higher ratio of Merensky to UG2 in the mix.
Underground and overall concentrator recoveries were satisfactory at 85.7%
and 85.6% respectively, a decrease of 0.4 and 0.2 percentage points
respectively when compared with the prior year period and a quarter on
quarter improvement of 0.4 and 0.3 percentage points respectively.
Platinum in concentrate from the Marikana operations was 173,564 saleable
ounces, a 3.3% increase over the prior year period. In total the
concentrators produced 181,172 saleable ounces of Platinum in the quarter, a
3.9% increase from the prior year period. This reflects the higher
proportion of Merensky ore in the mix which contains a higher percentage of
Platinum.
Total refined production for the quarter was 190,379 ounces of saleable
Platinum, a decrease from the prior year of 15.4%. This decrease is due
firstly to metal inventory in progress being temporarily affected by the
increase of sulphur in the feed to the Smelter and secondly, the prior year
refined production was significantly higher as operations normalised
following the rebuild and modification of the Number One furnace in quarter
one of 2011. Total Platinum Group Metals (PGMs) production for the quarter
was 355,590 ounces, a decrease of 19.2% from the prior year.
Sales & Pricing
Platinum sales at 225,539 ounces were 10.5% lower than the prior year period
as a result of the production constraints highlighted above and stock
movement in the quarter. Total PGMs sales decreased by 15.4% to 418,988
ounces.
Chrome sales have more than doubled when compared to the prior year period
as production at the chrome plants gains momentum.
The US dollar basket price at $1,164 during the quarter was 12.6% less than
the prior year quarter. The corresponding Rand basket price was 3.5% lower
than the prior year period.
Lonmin also publishes today, in a separate announcement, its interim results
for the half year ending 31 March 2012.
ENQUIRIES:
Investors / Analysts:
Tanya Chikanza +44 (0) 207 201 6007
Head of Investor Relations
Ruli Diseko +44 (0) 207 201 6000
Investor Relations Manager
Media:
Cardew Group +44 (0) 207 930 0777
James Clark/Emma Crawshaw
Inzalo Communications +27 (0) 11 646 9992
Gillian Findlay/Bridget von Holdt
3 months 3 months
to 31 Mar to 31 Mar
2012 2011
LTIFR 4.69 4.67
Tonnes Marikana Karee1 kt 1 248 1 107
mined
Westerns1 kt 747 853
Middelkraal kt 489 437
1
Easterns1 kt 284 305
Underground kt 2 769 2 703
Opencast kt 78 143
Total kt 2 847 2 846
Pandora Underground kt 51 44
attributable2
Lonmin Underground kt 2 819 2 746
Platinum
Opencast kt 78 143
Total kt 2 898 2 890
% UG2 % 71.3% 72.5%
Tonnes Marikana Underground kt 2 713 2 536
milled3
Opencast kt 162 316
Total kt 2 875 2 852
Pandora4 Underground kt 100 101
Lonmin Underground kt 2 813 2 636
Platinum
Head grade5 g/t 4.46 4.57
Recovery % 85.7% 86.0%
rate6
Opencast kt 162 316
Head grade5 g/t 2.68 2.16
Recovery % 84.6% 82.7%
rate6
Total kt 2 975 2 952
Head grade5 g/t 4.36 4.31
Recovery % 85.6% 85.9%
rate6
3 months 3 months
to 31 Mar to 31 Mar
2012 2011
Metals in Marikana Platinum oz 173 564 168 020
concentrate
7
Palladium oz 78 763 78 660
Gold oz 4 918 4 674
Rhodium oz 21 875 21 630
Ruthenium oz 33 674 34 734
Iridium oz 7 271 7 566
Total oz 320 065 315 284
PGMs
Nickel8 MT 973 921
Copper8 MT 621 576
Pandora4 Platinum oz 7 014 6 410
Palladium oz 3 238 3 001
Gold oz 53 45
Rhodium oz 1 080 975
Ruthenium oz 1 642 1 539
Iridium oz 270 255
Total oz 13 297 12 225
PGMs
Nickel8 MT 11 10
Copper8 MT 6 6
Concentrate Platinum oz 594 -
purchases Palladium oz 226 -
Gold oz 2 -
Rhodium oz 75 -
Ruthenium oz 90 -
Iridium oz 29 -
Total oz 1 016 -
PGMs
Nickel MT 0 -
Copper MT 0 -
Lonmin Platinum oz 181 172 174 430
Platinum
Palladium oz 82 227 81 661
Gold oz 4 973 4 719
Rhodium oz 23 030 22 605
Ruthenium oz 35 406 36 273
Iridium oz 7 570 7 822
Total oz 334 378 327 509
PGMs
Nickel8 MT 984 931
Copper8 MT 627 582
3 months 3 months
to 31 Mar to 31 Mar
2012 2011
Refined Lonmin refined Platinum oz 172 089 198 998
production metal
production
Palladium oz 77 683 95 643
Gold oz 4 873 4 119
Rhodium oz 31 723 24 245
Ruthenium oz 41 005 51 530
Iridium oz 7 385 8 768
Total oz 334 759 383 302
PGMs
Toll refined Platinum oz 18 289 26 154
metal
production
Palladium oz 66 13 090
Gold oz (2) 839
Rhodium oz 82 3 713
Ruthenium oz 1 979 10 935
Iridium oz 417 2 311
Total oz 20 831 57 042
PGMs
Total refined Platinum oz 190 379 225 152
PGMs
Palladium oz 77 749 108 733
Gold oz 4 871 4 958
Rhodium oz 31 805 27 958
Ruthenium oz 42 983 62 465
Iridium oz 7 803 11 078
Total oz 355 590 440 344
PGMs
Base metals Nickel9 MT 915 1 190
Copper9 MT 533 726
3 months 3 months
to 31 Mar to 31 Mar
2012 2011
Sales Refined Platinum oz 225 539 251 880
metal sales
Palladium oz 96 061 131 326
Gold oz 5 715 5 362
Rhodium oz 30 785 33 412
Ruthenium oz 53 227 61 610
Iridium oz 7 661 11 650
Total oz 418 988 495 240
PGMs
Nickel9 MT 1 002 1 217
Copper9 MT 549 688
Chrome9 MT 334 827 128 638
Average Platinum $/oz 1 583 1 784
prices
Palladium $/oz 673 788
Gold $/oz 1 676 1 153
Rhodium $/oz 1 410 2 390
Ruthenium $/oz 94 173
Iridium $/oz 1 041 885
$ basket excl. by- $/oz 1 164 1 332
product revenue11
R basket excl. by- R/oz 9 010 9 341
product revenue11
R basket incl. by- R/oz 9 466 9 852
product revenue12
Nickel9 $/MT 16 718 23 336
Copper9 $/MT 7 582 9 137
Chrome9 $/MT 17 26
Exchange Average rate for R/$ 7.74 6.98
Rates period13
Closing rate R/$ 7.65 6.77
Notes:
1 Karee includes the shafts K3, 1B and 4B and K4. Westerns
comprises Rowland, Newman and ore purchases from W1.
Middlekraal represents Hossy and Saffy. Easterns includes E1,
E2 and E3.
2 Pandora attributable tonnes mined represents Lonmin`s share
(42.5%) of the total tonnes mined on the Pandora joint
venture.
3 Tonnes milled excludes slag milling.
4 Lonmin purchases 100% of the ore produced by the Pandora joint
venture for onward processing which is included in downstream
operating statistics.
5 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).
6 Recovery rate in the concentrators is the total content
produced divided by the total content milled (excluding slag).
7 Metals in concentrate include metal derived from slag
processing and have been calculated at industry standard
downstream processing losses to present produced saleable
ounces.
8 Corresponds to contained base metals in concentrate.
9 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.
10 Concentrate and other sales have been adjusted to a saleable
ounce basis using industry standard recovery rates.
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.
Date: 14/05/2012 08:00:09 Produced by the JSE SENS Department.
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