Platinum mine Lonmin Plc cut its full-year sales forecast as it continued to be hurt by violent strikes between unions at its mines in South Africa.
The world’s No.3 platinum producer said it now expects to sell between 685,000 ounces and 700,000 ounces of platinum for the year ending Sept. 30. The company, whose shares have dropped 37% since January, said in August that it was unlikely to meet its previous target of 750,000 ounces.
Lonmin has been hit by a month of lost production and the absence of Chief Executive Ian Farmer, who has been on sick leave since last month.
It has already warned it is in danger of breaching debt covenants and has said it may need to raise equity. The covenants would likely be breached by Sept. 30, when they are due to be tested.
The strikes, arising out of a push for wage hikes, have already claimed the lives of 45 people, the company said.
Last week, striking workers rejected a pay offer from Lonmin, dimming prospects of ending several weeks of industrial action that has swept through South Africa’s platinum sector.
On Monday, the company said it gave notice to terminate its contract with Murray and Roberts — a contractor which supplies about 1,200 staff at its K4 shaft with effect from October 17.
“The situation is delicate but we have limited options in terms of managing the trade-off between lost production, higher wages and business rationalisation, including a significant reduction in jobs,” Simon Scott, Lonmin’s acting CEO, said.
“A prolonged delay in production will only force further difficult management decisions.”
Aquarius Platinum’s Kroondal platinum mine and Xstrata’s chrome mine near Rustenburg in South Africa restarted on Monday after suspending operations last week, although the situation on the ground remained tense.
Lonmin said mining activity at its Marikana remains minimal, though all shafts are operational.
Lonmin cuts sales forecast as strikes continue to hurt
Platinum mine Lonmin Plc cut its full-year sales forecast as it continued to be hurt by violent strikes between unions at its mines in South Africa.
The world’s No.3 platinum producer said it now expects to sell between 685,000 ounces and 700,000 ounces of platinum for the year ending Sept. 30. The company, whose shares have dropped 37% since January, said in August that it was unlikely to meet its previous target of 750,000 ounces.
Lonmin has been hit by a month of lost production and the absence of Chief Executive Ian Farmer, who has been on sick leave since last month.
It has already warned it is in danger of breaching debt covenants and has said it may need to raise equity. The covenants would likely be breached by Sept. 30, when they are due to be tested.
The strikes, arising out of a push for wage hikes, have already claimed the lives of 45 people, the company said.
Last week, striking workers rejected a pay offer from Lonmin, dimming prospects of ending several weeks of industrial action that has swept through South Africa’s platinum sector.
On Monday, the company said it gave notice to terminate its contract with Murray and Roberts — a contractor which supplies about 1,200 staff at its K4 shaft with effect from October 17.
“The situation is delicate but we have limited options in terms of managing the trade-off between lost production, higher wages and business rationalisation, including a significant reduction in jobs,” Simon Scott, Lonmin’s acting CEO, said.
“A prolonged delay in production will only force further difficult management decisions.”
Aquarius Platinum’s Kroondal platinum mine and Xstrata’s chrome mine near Rustenburg in South Africa restarted on Monday after suspending operations last week, although the situation on the ground remained tense.
Lonmin said mining activity at its Marikana remains minimal, though all shafts are operational.
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