Changes at mining houses 'necessary'

IT WAS only a matter of time, but the management restructurings announced yesterday by mining group Anglo American and platinum miner Lonmin have long been seen by analysts as necessary.

Lonmin is shifting its operational management team from London to Johannesburg - closer to the company's platinum mining operations - while Anglo is hacking out a whole layer of arguably-superfluous management so as to place decision making with the hands-on people on the ground, those who actually run the group's mines.

While Anglo is in the throes of a major top-management overhaul with non-core assets being hived off preparatory to their sale, the rest of the group showed distinct signs of emerging from recessionary set-backs in this year's third quarter.

Diamond production is resuming at some of the mines closed over the past year when the market collapsed, though output remains well below peak; iron ore production is growing as Kumba's Sishen mine ramps up throughput at its new jig plant; manganese ore production is improving and is expected to be at full capacity by this year's end; and copper production recovered as mining and infrastructural difficulties were resolved.

Anglo's most striking recovery situation is arguably, however, platinum. Third-quarter production fell below second quarter.

But with expectations that the year's 2,4million ounces target will be met this year, the fourth quarter is being set to produce 710000 ounces. That's still less than the 842000 ounces of 2008's fourth quarter, but a recovery trend is in place.

Lonmin continues to struggle with the effects of the closures of one underground shaft and two opencast mining operations.