South African platinum producer Lonmin will lift monthly production levels from 30% to 80% by the end of its financial year in September as it recovers from a five-month wage strike.
The strike has already cost the company 348 400 saleable platinum ounces and $322 million due to lost production, security costs and forfeited contracts. The strike ended in June when Lonmin, along with Anglo American Platinum and Impala Platinum, signed a three-year wage agreement with the Association of Mineworkers and Construction Union (Amcu) amounting to 20% wage rises.
“Ramp up to full production has started and we are making good and steady progress in terms of our plans to return to full production,” chief executive Ben Magara said. “We are experiencing stable attendance levels by our employees across all operations since the end of the strike.”
Lonmin’s immediate focus is on ensuring a safe and productive ramp up, and has seen good stable attendance with near normal levels of around 90% of employees.
“I am pleased with the enthusiasm in our management and all employees to the re-building of our relationships and operational credibility,” Magara said.
Nevertheless, Lonmin’s third quarter production has been severely impacted by the unprecedented five month strike and its nine months performance has been cumulatively impacted, with platinum metal in concentrate and sales of 238 735 ounces and 289 414 ounces, down 56.8% and 29.0% respectively.
“Our existing banking facilities are more than adequate to cover the costs of the strike and the ramp up. We are also assessing our medium to long-term options around improving the productivity and profitability of our business including cost reduction,” Magara said.
Lonmin ramps up to hit full production by Q1 2015
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