| Fri 24 Jan 2003, 10:50 | | Lonmin Plc - NEWS RELEASE |
|
Lonmin Plc - NEWS RELEASE
Lonmin Plc
4 Grosvenor Place, London SW1X 7YL
Tel +44 (0)20 7201 6000 Fax +44 (0)20 7201 6100
ISIN code: GB0031192486
24 January 2003
Lonmin Plc
Revised Production Plan
Following the serious furnace incident which occurred on December 26th, 2002,
contingency plans, which have been developed for such an event, were immediately
put into place. These included the re-commissioning of the stand-by smelting
capacity comprising the Merensky furnace, and three UG2 Pyromet furnaces. All
four furnaces are now operating satisfactorily. Arrangements were also made for
Impala Refining Services to toll refine concentrate, and regular shipments have
commenced.
A new production plan has been formulated as a result, and Lonmin now expects to
produce not less than 840,000 tr. oz of Platinum during the Financial Year ended
September 30, 2003, which is a year on year increase of 11%. The half-year
figure is expected to be similar to that of last year at around 320,000 tr. oz.
There will be additional costs associated with the revised production plan,
which will have a greater effect on the first half results. The expected year
on year increase on the full year Rand cash costs, including royalties, is
expected to be approximately 20%, which includes an anticipated inflation figure
of 14%.
Insurance policies were in place which cover both property damage and business
interruption, and discussions have been held with the Loss Adjusters
representing the Underwriters. We are confident of a satisfactory outcome, but
at this stage we cannot, with accuracy, quantify the amounts to be recovered,
and therefore no insurance credits have been included in the above cash cost
estimates.
The investigation into the cause of the incident is well advanced. If our
initial analysis is confirmed, given management`s confidence in the contingency
production plans, we may take the opportunity to carry out certain modifications
to the furnace, which would delay re-commissioning. We have therefore assumed
no further production from the no. 1 furnace during the current financial year,
but expect full contribution to both production and cost efficiencies during the
following financial year.
Apart from the current year`s 3% production loss and associated cost increase,
Lonmin`s announced long-term growth programme remains unaffected by this
incident. The recently announced autocatalyst re-cycling initiative will also
continue, using the spare capacity available in the Merensky furnace.
End
For further information contact:
CardewChancery
Anthony Cardew / Jackie Range +44 (0)20 7930 0777
Date: 24/01/2003 09:00:00 AM Produced by the JSE SENS Department
