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Lonmin reports increased Q3 PGM sales despite lower production

27th July 2018

By: Marleny Arnoldi

Deputy Editor Online

     

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Platinum producer Lonmin mined 2.6-million tonnes of ore for the quarter ended June 30, which is a 3.1% year-on-year decrease, partly reflecting the planned reduction in mining from Generation 1 shafts and in line with company strategy to reduce high-cost production in a low-cost industry environment.

The miner reported that concentrator recoveries continue to be excellent, improving to 87.4% in the third quarter of the current financial year, from 86.8% in the comparable quarter last year.

Platinum group metal (PGM) sales increased by 2% to 352 128 oz for the quarter but platinum sales of 176 121 oz decreased by 2.3% year-on-year.

“The smelters are running normally and we are on track with the planned release of stock that was previously locked up in the smelter. We maintain our full-year sales guidance of 650 000 to 680 000 platinum ounces,” Lonmin said.

The average rand basket price is up 13.1% on the prior year period, at R13.01 per PGM ounce.

Meanwhile, the UK’s Competition and Markets Authority approved the proposed acquisition of Lonmin by precious metals miner Sibanye-Stillwater in June, which is now on target to close in the second half of the year.

Lonmin also entered into a conditional sale of shares agreement to sell the 50% interest in Petrozim Line for $14.7-million to the National Oil Infrastructure Company of Zimbabwe.

Additionally, Lonmin will receive $8-million in the form of special dividends from Petrozim.

The transaction forms part of Lonmin’s ongoing programme to dispose of noncore assets and is expected to be completed in the fourth quarter.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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