* Refined platinum output up 45 pct in Q1 to Dec. 31
* Q1 mined output falls on fatality, stoppages, weak prices
* Strike costing 3,100 ounces/day of refined output
By Silvia Antonioli
LONDON, Jan 30 South African mining company
Lonmin said a strike was cutting platinum
production and could force it to reassess guidance for the year
after it posted a rise in output for the past quarter.
The world's third-biggest platinum producer is currently
losing about 3,100 ounces of refined output per day because of
the strike over wages, which started a week ago.
In an attempt to end the industrial action, the company on
Thursday revised its wage offer to South Africa's Association of
Mineworkers and Construction (AMCU). The offer still fell short
of the union's demand for a 12,500 rand ($1,100) per month
"Before the start of the strike we would have maintained our
guidance for the full year ," the company said. "However, due to
the ongoing strike, we will reassess our guidance and update the
market in due course."
Lonmin has been targeting sales of over 750,000 ounces, $210
million in capital spending and a rise in production costs below
wage inflation for the year to end-September 2014.
In its first fiscal quarter to Dec. 31, refined production
increased by 45 percent to 196,249 saleable platinum ounces
compared with the same period a year before.
"The production outcome is very pleasing as the Christmas
period usually restricts production, and we were concerned that
our 189,000 estimate was too optimistic," Citi analysts said in
"Healthy stockpiles and a trouble-free smelting complex have
resulted in good refined platinum output."
FATALITIES AND SAFETY STOPPAGES
Sales for the quarter were 134,804 ounces, an increase of 24
percent, helped by an improvement in recovery rates.
But output from its mines fell by 10 percent to 2.6 million
tonnes as the momentum it built up in 2013 was disrupted by a
fatality and safety stoppages, Lonmin said.
Also it reduced mined output from the opencast operations in
its first quarter because prices were weaker, the company said.
"They entered the quarter with very high inventories because
they had a smelter disruption previously, and that turned out to
be a blessing for them because they could make sure they had
plenty of inventories to see them through disruptions," Investec
analyst Marc Elliott said.
Lonmin had been recovering from 2012, when it was at the
centre of a wave of mining strikes that left dozens dead. The
labour unrest and violence left it so battered that the company
had to tap shareholders for cash.
South Africa has been shaken by a turf battle for membership
between the National Union of Mineworkers and the AMCU, with
both unions accusing each other of attacking and killing their
In 2013, at least three men were shot dead near Lonmin's
Marikana mine between June and October, sparking fears of a
renewed cycle of violence in the troubled platinum belt.
Concerns about the company's prospects have resurfaced
during the latest strike.
"If the strike is resolved within a couple of weeks, they
could be able to catch up and meet their guidance, but if we
start to get towards a month, then it's slightly more worrying,"