Lonmin’s profits plunge as strike hurtsComment on this story
London - South African platinum miner Lonmin posted a steep fall in earnings on Monday, battered by a 15-week mining strike over pay which has paralysed its production operations.
The longest and most costly labour stoppage for top platinum producer South Africa has cut 40 percent of global production and has halted Lonmin operations at its mines and processing plants.
Lonmin, the world's third-largest primary platinum producer, posted underlying earnings before interest and tax (EBIT) of $34 million (R353 million) for the six months to the end of March, down from $93 million a year earlier.
“This has been a challenging first half of the year, latterly dominated by protracted industrial action across the PGM sector,” chief executive Ben Magara said.
“Whilst we continue to work to resolve this dispute we have also taken decisive and early action to reduce cash burn, to safeguard our great assets and protect our balance sheet integrity ahead of a safe and successful ramp-up when the strike ends.”
Lonmin said it produced 215,117 ounces of platinum in concentrate, down 41 percent from a year earlier and sold 263,675 ounces, down 19 percent.
The producer said it anticipated a “mass return to work” on Wednesday at its strike-hit South African operations, according to an internal company memo sent to employees last week.
“In anticipation of finding a solution to the strike we will start the processing operations during May 2014 to process the remaining material in the pipeline. However, if the strike continues, we will fully deplete the pipeline and limit further cash outflow,” the company said on Monday. - Reuters