JOHANNESBURG (miningweekly.com) – After last month announcing a programme of shaft closures and workforce reduction aimed at cutting its cost base amid a depressed platinum pricing environment, Lonmin says 1 400 employees have left the business, with a Section 189 consultation process on the remainder of the significant downsizing proceeding as scheduled.
The company’s stoppage of high-cost production and the planned reduction of 6 000 jobs was intended to reduce costs and capital expenditure (capex).
“Over the next two years, 100 000 oz of high-cost production will have been eliminated, but, in the meantime, the available resources of [the Marikana mine’s] Hossy shaft will be mined for value.
“By the end of 2017, production will have reduced by 100 000 oz/y. Management has the target of cutting fixed and overhead costs at the same time,” the company said in a statement, adding that labour relations continued on a “positive and realistic” basis.
Against a cost guidance of R10 800/oz, at the end of July, year-to-date underlying cash costs on an unaudited basis were R10 499/oz, while underlying cash costs for the full year were expected to remain below the cost guidance of R10 800/oz.
The company added that it had outlined a clear objective of containing capex while cash-harvesting immediately available ore reserves from the Hossy and Newman shafts.
To support the delivery of these objectives, Lonmin appointed financial specialist Ron Series as adviser.
“We welcome the support Ron will provide with his specialist skills and his wealth of experience. This will enable our executive team to focus on running the business, cutting costs and ensuring the most efficient running of our operations.
“Lonmin’s objective is to maximise cash in the short-term and preserve long-term value for shareholders and all stakeholders and ensure the business is put in the right position to take full advantage of any improvement in platinum group metals prices from the currently depressed levels,” commented Lonmin CEO Ben Magara.