PGM operations recorded sales of 681 580 platinum ounces in the year to September 2018. Photo: Bloomberg

JOHANNESBURG – Lonmin has managed to deliver on its 2018 sales target on the back of a strong price environment. 

The miner said yesterday that its operations recorded sales of 681 580 platinum ounces in the year to September 2018, above the forecast of between 650 000 and 680 000 platinum ounces. 

It said the dollar basket price for platinum group metals (PGM) surged 20.4 percent on the previous year, while the rand/dollar exchange rate for the year was 2.3 percent stronger at R13.07, compared to R13.37 for the prior year.

Lonmin chief executive Ben Magara said the sales for 2018 were proof that the company remained resilient. “Despite tough market conditions, except the favourable rand, we have delivered more than we promised in all areas of our business,” Magara said. “These pleasing results demonstrate once again that despite these uncertain times, we can dig deep and use all levers within our control to maintain our net cash position.” 

Lonmin, the world’s third biggest platinum producer, also improved liquidity in the year under review.

Net cash jumped to $114 million (R1.64 billion) in the year ended September 30, 2018, from $103m at September 30, 2017.

Production at the Generation 2 shafts, which account for around 77 percent of output, increased 1.6 percent year-on-year to 7.6 million tons, reflecting consistent performance at the core shafts. 

However, output at Generation 1 shafts was shadowed by high cost with shorter lives, continuing its decline by 13.2 percent at 2.3 million tons, in line with the plans to restructure these operations. The company also planned to place its Newman shaft on care and maintenance last March.

Lonmin, which employs 32 000 people, said tons lost due to Section 54 safety stoppages for the year were significantly lower at 20 000 tons compared to 276 000 tons during the comparative period last year. 

“This emphasised our improving safety performance and our continued proactive engagement with all stakeholders, including employees, organised labour, the Inspectorate of the Department of Mineral Resources and communities,” Lonmin said. “The reduced operational disruptions facilitated a safe mining rhythm which is crucial for good production.”

The group said that its unit costs for the year were R12 271 per PGM ounce, an increase of 4.9 percent on the R11 701 per PGM ounce achieved in the prior year, and within the unit cost guidance of between R12 000 and R12 500 per PGM ounce.