Platinum producer Lonmin Plc (LMI.L) reported Thursday a decline in sales quantity and a 20% drop in total tonnes mined for the fourth quarter to 30 September 2009. The company also provided an outlook for the sales volume and production for 2010, and announced its plans to relocate its operational headquarters to Johannesburg from London. Unwilling to move to South Africa, Alan Ferguson, Lonmin's chief financial officer, has decided to resign by year end.
For the fourth quarter, total Platinum Group Metals, or PGMs, sales decreased to 358.81 thousand ounces from 498.21 thousand ounces, as platinum sales dropped to 192.61 thousand ounces from 257.68 thousand ounces in the previous year.
Total tonnes mined declined 20% to 2.63 million from 3.28 million, due to planned closure of opencast operations at Marikana and Pandora, and the placing of Baobab shaft at Limpopo on to care and maintenance.
Production from Lonmin's Marikana underground operations dropped 6% to 2.58 million tonnes from 3.04 million tonnes, as conventional underground mining operations production reduced 15% to 2.07 million tonnes from 2.44 million tonnes. Substantial rise in number and severity of Section 54 safety shutdowns in the quarter resulted in the year-over-year decline, the company noted.
Total tonnes milled came down 12% to 3.01 million from 3.44 million. Total PGMs of metals in concentrate reduced to 322.51 thousand ounces from 374.82 thousand ounces, as the concentrators produced 172.08 thousand saleable ounces of platinum, down 14% from 200.31 thousand ounces in the year-ago quarter.
Underground milled head grade decreased 1.5% year-over-year to 4.59 grammes per tonne, because of reef control issues at certain areas of the Merensky reef, compiled with mining through localised low grade areas on that reef horizon.
Lonmin revealed that the Number One furnace was run at lower power for most of the period, following a matte run out in June, and was supported by the running of Pyromet furnaces.
A re-design at the furnace impacted refined production, which was 166.85 thousand ounces of platinum, down 27% from 228.94 thousand ounces in the prior-year quarter. Total refined PGMs shrank 25% to 317.84 thousand ounces from 425.79 thousand ounces.
For the full year, total tonnes mined declined to 10.8 million from 12.45 million in 2008. Total Marikana underground production was 10.2 million tonnes flat from last year. Lonmin said that underground ore reserve development at Marikana was 2.0 million square metres of immediately available ore reserves the end of September 2009, up from 1.9 million square metres at the end of March 2009.
The concentrators produced a total of 663.10 thousand saleable ounces of platinum in concentrate during the year, down 9% from 732.12 thousand saleable ounces, mainly due to closing production at the Marikana and Pandora opencast operations, as well as Limpopo.
Total refined PGMs production declined 7% to 1.24 million ounces from 1.33 million ounces a year earlier, as total refined platinum production reduced to 657.32 thousand ounces from 699.94 thousand ounces.
Total PGMs sales decreased year-over-year to 1.27 million ounces from 1.40 million ounces, as platinum sales came down to 682.95 thousand ounces from 726.92 thousand ounces in fiscal 2008.
Looking ahead to fiscal 2010 and amidst various impeding factors, including expected industry related challenges for South African PGM producers, Section 54 safety stoppages, and high South African mining inflation, the company expects Marikana mining production to grow, more than offsetting lower opencast tonnes and ounces from Pandora, as these pits are now closed. Lonmin foresees this to allow metals in concentrate production to rise around 5%, and, consequently the company anticipates to achieve 2010 sales of about 700 thousand platinum ounces.
Separately, Lonmin also announced that it intends to shift its operational headquarters to Johannesburg from London in order to place the executive management team in a single location close to mining operations.
The company's CEO, Ian Farmer, will relocate to Johannesburg on 1 January 2010. Alan Ferguson, Lonmin's financial chief, unwilling to move on to South Africa, said that he would resign from his position after remaining in service and on the board until 31 December 2010 at the earliest.
Further, the Board of Lonmin will remain based in the UK and a small office will be retained there to support the Board and the primary listing of the company's shares on the London Stock Exchange.
Roger Phillimore, Chairman of Lonmin, said, "The Board's key functions of management oversight, strategic direction, decision making and corporate governance will remain in London."
LMI.L is currently trading at 1,646 pence, down 45.0 pence or 2.66% on the LSE.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.