Johannesburg – Lonmin is maintaining its full-year
guidance at between 650 000 and 680 000 platinum ounces despite a disappointing
first quarter.
In a statement issued to shareholders on Thursday, the
listed platinum producer, added unit costs should remain unchanged at between
R10 800 and R11 300 per platinum group metal ounce.
Its Marikana mining operations, including Pandora,
produced 2.3 million tonnes during the quarter, down 7.8 percent or 200 000
tonnes on the comparative period partly due to the planned decline from the closing
of its high cost shafts.
“While the first quarter of our financial year is
historically our lowest producing quarter, the mining performance was disappointing
with production at our generation 2 shafts down 5.2 percent from the prior year
period.”
Lonmin adds the implementation of initiatives to improve
productivity is taking longer we planned, especially around improving
absenteeism.
“However, we remain committed to delivering sustained
productivity improvements at our operations to ensure the long-term viability
of the business.”
It notes the reduction in Section 54 stoppages has
continued, with tonnes lost due to Section 54 safety stoppages down by 71
percent in the quarter.
Its biggest shaft, K3, produced 590 000 tonnes, down
a “disappointing” 13.8 percent on the previous period.
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“This shaft was most impacted by the reorganisation from
2016 and, during the quarter, experienced high management induced safety
stoppages resulting in 60 000 tonnes of lost production.
“Overall, the relationship between operational management
and unions at this shaft is not working as effectively as we expected and the
yielding of results from the implementation of business improvement initiatives
at this shaft is taking longer than we would have liked to see.”
As a result, it is deploying additional stoping and
vamping crews to the shaft to take advantage of the immediately available ore
reserves and improve production, it says.
Rowland shaft produced 42 ,000 tonnes, an increase of 9.6
percent on the prior year period as this shaft is now starting to gain the
production benefits from improved safety performance.
Saffy shaft produced 493 000 tonnes, broadly in line with
prior year period, demonstrating that the shaft is maintaining its steady state
performance.
4B produced 336 000 tonnes, a decrease of 10.7 percent on
the prior year period as a result of higher than planned frequency of
intersecting geological features and changes in middle management.
However, Lonmin says, the performance at the Generation 1
shafts is in line with its plan and it is successfully executing the strategy
to reduce high cost production in a low price environment. Tonnes mined from
these shafts were 500 000 tonnes, or 21.8 percent lower.
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