Lonmin has brought forward its planned rebuilding of the number one furnace by ten months. The action is in response to a leak from the furnace, which cannot be operated consistently, and the three-month repair and rebuild is the safest and the most efficient method of mitigating closure of the furnace.
Lonmin, the third largest producer of PGM’s, has stated that the back up facilities (three smaller Pyromet furnaces) will be put into operation and this will prevent any impact on refined production for the 2015 financial year.
Lonmin further predict that sales for the next financial year will now be back-end loaded as planned and further, capital spend will be brought forward to the first quarter of 2015. They estimate that borrowings will therefore have to increase at the end of March 2015. This increase however is expected to be well within existing borrowing facilities and the capital expenditure to rebuild the furnace is all in the budget for 2015.