Investigations had begun into options for additional smelter backup capacity, Lonmin, which is experiencing problems with its furnace, said in its latest annual report.

Lonmin CEO Ian Farmer said that it was crucial that the growth in mined production be supported by processing capacity and reliability, particularly at the company’s smelting facility.

Lonmin experienced a matte run-out at its number one furnace in June.

“Our knowledge of the workings of the furnace has improved as a result of the incident,” Farmer said.

He has now relocated from London to Johannesburg.

While smelting would always be a high-risk aspect of the platinum- mining industry, Farmer said that Lonmin was confident that it would improve the vessel’s reliability through improved management.

From a capacity perspective, Lonmin’s number one furnace and its Pyromet furnace had the capacity to support current and medium-term levels of production. The company produced 663,101 oz of platinum concentrate for the year and 1 249 214 oz of platinumgroup metals.

However, taking into account its longer-term growth ambitions, and the need to mitigate the risk of smelter disruptions, Farmer said that the company was anticipating a requirement for increased smelter capacity in the coming years.

“We have, therefore, started to investigate options for additional backup capacity,” he said, adding that the 101st annual general meeting of the company would be held on January 28, in London.

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