Lonmin will look to invest in further smelting back-up in order to stave off its furnace issues in South Africa, it was announced on Tuesday (15th December).

The world's third-largest platinum producer has developed a reputation for safety-related problems and it experienced a matte run-out at its Number One furnace in June.

Pyromet furnaces have since been used to support production, with Lonmin posting platinum and pgm concentrate outputs of 663,101 oz and 1.249 million ounces respectively for the year.

However, CEO Ian Farmer conceded that the company must make a substantial commitment to ensure that smelting disruptions are reduced in the longer term.

"Our knowledge of the workings of the furnace has improved as a result of the incident," he said.

"We have therefore started to investigate options for additional back-up capacity."

Mr Farmer added that improved management should limit issues in the future, despite the fact that the considerable risks involved in smelting will not disappear.

Last week, Xstrata Chief Executive Mick Davis confirmed in an interview with Bloomberg that the diversified Swiss miner is still keen to increase its 25 per cent stake in Lonmin.

Sources:

Furnace-dogged Lonmin investigating more smelter backup (15/12/09)

Xstrata CEO Says 'Don't Hold Your Breath' on Deals (Update1) (08/12/09)

© Adfero Ltd