* Says total tonnes mined relatively flat
* Platinum sales up 16.7 pct at 108,342 ounces
* On track to hit sales target of 660,000 ounces
* Chairman says firm taking lead in employee relations
* Shares up more than 12 percent
By Lorraine Turner and Paul Sandle
LONDON, Jan 31 South African miner Lonmin
has started to put a troubled year behind it,
saying production in the last three months of 2012 bounced back
more strongly than expected from crippling strikes earlier in
The world's third-largest platinum producer said on Thursday
its performance in the quarter "substantially exceeded" its
planned ramp-up in output after strikes and violence paralysed
its Marikana mine for six weeks from mid-August.
The company also stuck to its targets for sales, costs and
capital spending for its financial year ending September 2013.
Lonmin shares surged more than 12 percent after losing
almost half their value in 2012.
The mine was at the centre of a wave of labour unrest and
violence in South Africa's mining industry that left dozens
The wildcat stoppages at Marikana, scene of South Africa's
most violent episode since the end of apartheid, added to the
troubles facing the country's platinum industry, which have also
included weak demand and cost pressures.
Chairman Roger Phillimore told the company's annual
shareholders' meeting that Lonmin would work to rebuild trust
with its miners and unions.
"The mining industry in South Africa is at a cross roads,"
he said at the meeting in central London. "It is imperative that
Lonmin does its part to contribute to improved relations with
its employees both inside and outside the workplace."
He said changes couldn't be made without the support of
government, union and employees, but Lonmin was taking the lead
in areas such as employee relations, use of local labour, and
improving housing and accommodation.
The company had made progress in restoring production, he
said, but it would take time for the impact on the company's
28,000 employees to fade. "We are still operating in a tense
industrial relations climate," he said, addressing about 40
shareholders in an oak-panelled room.
The causes of the strike were complex, he said, and factors
such as inter-union rivalry and political agendas played a part
as well as the less-than-ideal employment conditions.
"The key thing not to forget in this is, I believe, this
company played no part in the deaths of 44 people." he said.
Platinum, used in catalytic converters in cars, has come
under pressure during the global economic downturn and from the
slump in car demand, particularly in Europe.
The strikes, weak platinum prices and high costs meant
Lonmin had one of the most stretched balance sheets in the
platinum sector. It was forced to turn to investors in November
to raise $817 million to avoid breaching lending terms.
Lonmin said last year it had lost 110,000 ounces of
production and scaled back long-term plans to boost output and
sales. Meanwhile rival producer Anglo American said on
Friday its quarterly production figures had been badly dented by
Lonmin's trading update offered investors some reassurance.
"The results were quite significantly ahead of where I'd
expected them to be," said Panmure analyst Alison Turner.
"They had a very, very bad year last year on a number of
fronts but they've now got the balance sheet addressed and
operationally they seem to be doing very well, that underpins
what is happening in the share price," she added.
Lonmin aims to sell 660,000 ounces in the financial year to
the end of September 2013. But Turner said this could be on the
conservative side: "There's potential for upside."
Lonmin opened an official search for a new chief executive
at the end of last year after Ian Farmer, who is being treated
for a serious illness, officially stepped aside.
At the annual meeting, 29 percent of shareholders voted
against a proposed pay package for the company's directors.
The remuneration of executives, including a significant
retention award payment to the chief financial officer, serving
as interim CEO, were deemed insensitive by some pressure groups
in light of the labour relation problems last year, according to
PIRC, one of Britain's leading shareholder advisory groups.
Lonmin said quarterly platinum sales rose 16.7 percent to
108,342 ounces while total platinum group metals (PGM) sales
fell 3.7 percent to 182,576 ounces. The average price it
received for platinum rose 3.5 percent to $1,176 per ounce.
Spot platinum prices are on track for their biggest
monthly rise in a year, outperforming other precious metals like
gold and silver as an increasingly optimistic view of the global
economy favours industrial metals. But they remain more than 25
percent below their 2008 peak.