Lonmin chief
executive Ian
Farmer
 
London, England — 14 May 2012 – Platinum producer Lonmin says the company’s first-half pre-tax profit fell to US$18 million from US$159 million a year ago, hit by rising costs, weak European demand and safety stoppages that weighed on its production over the six months.

Reuters reports, however, that the world’s third-largest platinum producer has stuck to its 2012 guidance for costs and to its production target of 750,000 platinum ounces, in the event of no further abnormal production interruptions from safety stoppages, labour and community unrest.

The platinum industry in South Africa has been battered by safety stoppages but also by labour disputes, and rising power and labour costs. Lonmin said its rand unit costs rose 10.9%  in the first half to the end of March, but stuck to its full year target of 8.5%.

Platinum sales for the six months totalled 318,402oz, broadly flat on last year.

“The inflationary increases in our costs and what seemingly appears to be an unrelenting depressed pricing environment also impacted our profitability and cash flows,” said Lonmin chief executive Ian Farmer. “We have been managing our net debt closely and will continue to do so. We remain on track to meet our full year guidance.”

Source: Reuters. For more information, click here.