Johannesburg, South Africa — MININGREVIEW.COM — 26 May 2010 – World number three platinum producer Lonmin has extended the shutdown of its key Number One furnace by another month, forcing the group to toll-treat material to maintain its sales guidance of 700 000 oz of platinum this year.
Miningmx reports that Lonmin told the market at the end of March that it was shutting down Number One furnace for 30 to 40 days because of a leak. It added that it would offset the lost production by starting its three Pyromet furnaces, which together have around 40% of the capacity of Number One furnace.
“Now Lonmin has suffered a setback during the recommissioning process of its Number One furnace in the form of a leak around a slag tap hole. The incident happened as the furnace was still being stabilised following its restart on 12 May,” Lonmin said in a statement.
“In order to maintain our sales guidance of 700 000 ounces of platinum for 2010, we will need to increase the volume of toll refining over and above our current contractual commitments,” the statement added.
Lonmin has struggled with a string of failures at its Number One furnace. Analysts say the high chrome content in its concentrate lies at the heart of its ongoing difficulties with the furnace.
At the end of January, Lonmin reported quarterly results that showed signs of operational improvements, and it maintained its full-year production forecast of 700 000 oz, with operating costs seen below the South African inflation rate.
During the quarter to end-December 2009, Lonmin completed a month-long rebuild of its Number One furnace, resulting in overall refined platinum output falling nearly 17% year-on-year at 110 768 oz “mainly as a result of metal-in-process inventory timing differences,” the company said.
There was also a two-month rebuild of the furnace from November 2008 to effect redesigns to make it more effective.