Lonmin is confident that its pgm output levels will not be impacted by the troublesome Number One furnace in the future, Mining Weekly reported yesterday (22nd October).

The world's third-largest platinum producer was forced to shut down the facility in mid-June after a matte run-out and operated it at reduced power for most of the fourth quarter.

As a result, the company saw its overall sales of platinum decline by 6.7 per cent to 682,955 oz on an annualised basis for the 2009 financial year to 30th September.

However, Chief Executive Ian Farmer explained in an interview with the news provider that a redesign of the matte tappe hole and a rebuild of the furnace are underway.

"I feel confident that we're going to be able to run it well going forward," he said.

Mr Farmer added that the furnace - which is Lonmin's largest - would be back up and running in mid-November and tapping matte again by the end of next month.

The company also announced that production at its underground mine at Marikana remained flat at 10.2 million tonnes, with key shaft ramp-ups offset by safety stoppages.

According to the figures, output at the mechanised and hybrid shafts rose by 49 per cent to 1.7 million tonnes during the year, but shut downs cost 513,000 tonnes of ore.

Mr Farmer noted that Lonmin will address its safety concerns by attempting to better inform the Department of Mineral Resources of how it is attempting to resolve issues.

In addition, he suggested that it will improve its relationships with unions because maintaining a safe working environment and responsible employee behaviour go "hand in hand".

Lonmin also confirmed that production at the conventional underground shafts at Marikana slumped by 600,000 tonnes to 8.5 million tonnes for the financial year.

The company is attributing the decline to closures caused by a combination of safety-related problems and the major restructuring programme currently in place.

Turning to supply and demand, Mr Farmer claimed that the 2009 calendar year will see a platinum surplus of between 100,000 oz and 200,000 oz before balancing out in 2010.

He also predicted that a deficit will arrive in 2011 or 2012, when the impact of the lack of investment in the industry during the financial crisis will see demand outstrip supply.

Diversified Swiss miner Xstrata, which has a 25 per cent stake in Lonmin, has recently been linked with a bid for the company.

Source

Lonmin relocates HQ to SA, CEO expects platinum deficit in 2011 (22/10/09)

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