Lonmin PLC Marikana Update (3948M)
September 17 2012 - 5:11AM
UK Regulatory
TIDMLMI
RNS Number : 3948M
Lonmin PLC
17 September 2012
Lonmin Plc
4 Grosvenor Place
London SW1X 7YL
United Kingdom
T: +44 (0)20 7201 6000
F: +44 (0)20 7201 6100
www.lonmin.com
17 September 2012
Marikana Update
Sales Guidance for FY 2012
Lonmin announces that as a result of the ongoing illegal strike
at its Marikana operations and following the updated guidance the
Company gave in regulatory announcements on 16 and 21 August 2012,
it now expects sales for the full year ending 30 September 2012 to
be in the range of between 685,000 and 700,000 saleable ounces of
Platinum. Unit costs will also be negatively impacted and as a
result we expect the guidance of an 8.5% increase in unit costs for
the full year to be exceeded.
This sales guidance reflects the Company's inability to mine in
recent weeks because of the illegal strike and the serious and
organised violence and intimidation aimed at blockading the
Company's processing plants at the mine.
K4 Shaft
On 26 July 2012 the Company announced that in light of the weak
pricing environment, some capital expenditure at the K4, Hossy and
Saffy shafts was being deferred so as to reduce annual capital
expenditure in the 2013 and 2014 financial years to $250 million
per annum. Lonmin further announces today that as part of that
on-going capital expenditure review it will be moving its K4 shaft
to care and maintenance. The Company has today, Monday, given
notice to terminate its contract with Murray and Roberts the
contractor which supplies approximately 1,200 staff at the K4 shaft
with effect from 17 October 2012.
A further announcement on the broader implications of this
decision will be made in due course.
Update on Marikana illegal strike
Mining activity at Marikana remains minimal, although all shafts
are operational. Sadly, violence and intimidation have continued
particularly in the last week and prevented many of our employees
from returning to work during the period of the illegal strike.
The Company regrets to confirm that the body of one of our
employees, a 51-year-old man, was discovered last week near the
scene of protests at Marikana. The South African Police Service is
investigating. Lonmin will provide financial assistance to the
deceased's family in line with the commitments the Company has made
to the families of employees who lost their lives as a result of
the violence that has occurred since the illegal strike began on 10
August. This brings the number of people who have now died since
the start of the illegal strike to 45.
Lonmin condemns violence and intimidation and is committed to
finding a peaceful solution to the current illegal strike. The
Company remains in constant dialogue with unions, government,
investors, customers and our regulators as it seeks a solution
which is sustainable, fair to all parties, and affordable to the
Company, and on which so many jobs in the region rely.
On the night of Thursday 6 September 2012, Lonmin along with the
unions, NUM, UASA and Solidarity signed a Peace Accord. This was an
important step, setting a framework for further discussions and
rejecting violence. Neither AMCU, nor those representing the
striking workers who are not union represented, were willing to
sign the document.
With the agreement of all Peace Accord signatories, Lonmin
invited AMCU and the worker representatives to participate in
agreeing on an addendum to the existing wage agreement. These
discussions are being facilitated by the Commission for
Conciliation, Mediation and Arbitration (CCMA).
Last week an initial offer was made which was rejected. Lonmin
made clear publicly that it was disappointed by the rejection of
the offer and the reluctance to review the R12,500 wage demand.
Lonmin further stated that a peaceful settlement was only possible
if all parties negotiated in good faith. The Company remains
committed to a sustainable, agreed solution and looks forward to
the resumption of talks today [Monday].
Lonmin wishes to thank the government of the Republic of South
Africa, religious leaders, traditional leaders and the CCMA, along
with the unions representing our employees, our investors,
customers and peers, for the parts they have played in the talks
thus far.
Simon Scott, Acting CEO, said "Our view is that negotiations are
the best way to achieve a sustainable return to work. Clearly
however, there will be consequences to jobs if there is a
continuing delay in returning to production. 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. There
are already jobs that are at riskbecause of the current economic
climate. The unprotected strike has already added pressure to some
of our higher cost shafts. A prolonged delay in production will
only force further difficult management decisions."
- ENDS -
GENERAL MEDIA ADDRESS:
media@lonmin.com +27 (0)14 571 2060/2055
ENQUIRIES
Investors / Analysts:
Lonmin
Tanya Chikanza (Head of Investor +27 (0)11 218 8358/ +44 (0)7825
Relations) 877 934
Media:
Cardew Group - London
James Clark / Emma Crawshaw +44 (0)20 7930 0777
Sue Vey +27 (0)72 644 9777
Notes to editors
About Lonmin:
Lonmin, which is listed on both the London Stock Exchange and
the Johannesburg Stock Exchange, is one of the world's largest
primary producers of Platinum Group Metals (PGMs). These metals are
essential for many industrial applications, especially catalytic
converters for internal combustion engine emissions, as well as
their widespread use in jewellery.
Lonmin's operations are situated in the Bushveld Complex in
South Africa, where nearly 80% of global PGM resources are
found.
The Company creates value for shareholders through mining,
refining and marketing PGMs and has a vertically integrated
operational structure - from mine to market. Lonmin's mining
operations extract ore from which the Process Division produces
refined PGMs for delivery to customers. Underpinning the operations
is the Shared Services function which provides high quality levels
of support and infrastructure across the operations.
For further information please visit our website:
http://www.lonmin.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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