Platinum strike caused 391,000 ounce loss says Lonmin

The five-month strike in the platinum sector caused a loss of 391,000 saleable ounces over the last financial year, mining company Lonmin reported in results released on Monday.

The company, in results "dominated by strike impact", experienced platinum sales of 441,684 ounces for the year ended September 30, 2014, and improved lost time injury frequency rate (LTIFR) by 4.6 percent.

Revenue was US965 million (R10.84 billion), while the company made an operating loss of US255m (R2.86bn), against a profit of US147m (R1.65bn) last year.

Underlying profit before taxation was US46m (R517.4m) versus US158m (R1.77bn) in 2013, and net debt was US29m (R325.9m) with available committed facilities of US575m (R6.46bn), against net cash of US201 (R2.25bn) in 2013.

Idle production costs during the strike resulted in production cost per a platinum group metals (PGM) ounce increasing by 47 percent, while capital expenditure was a "carefully managed" US93m (R1.04bn).

Underlying earnings per share were 5.4 cents versus 20.5 cents in 2013.

Lonmin said it had maintained operation flexibility, with available ore reserves at an average of 21 months production, and exceptional instantaneous recovery rates had improved to 86.2 percent.

While the LTIFR rate had improved, one fatality was recorded on October 26 last year.

CEO Ben Magara said: "This year has been unique, with a strike of unprecedented length halting production for five months.

"Notwithstanding that, we have made progress in a number of areas. Our ramp-up exceeded all expectations and we are renewing our operational credibility."

Lonmin's business review had opened up real opportunities to reduce costs, improve productivity and capital efficiency, with increasingly encouraging results seen in these areas.

"We have made significant management and operating model changes as we take Lonmin to the next level," he said.

Association of Mineworkers and Construction Union members at Anglo American Platinum, Lonmin, and Impala Platinum downed tools on January 23, demanding a R12,500 basic monthly salary.

The strike ended on June 24 when they accepted a three-year wage deal that would increase salaries by R1000 in the first and second year and R950 in the third year.