Lonmin posted mixed production results in the third quarter but was again dogged by furnace problems, it was confirmed today (22nd July).

The world's third-largest producer of the precious metal saw a 10.9 per cent rise in production in concentrate, mainly due to higher volumes and good recoveries from processing.

However, refined platinum production declined by 46.7 per cent to 91,952 oz in the three months through June from a year earlier, with nine-month output down 22 per cent to 383,873 oz.

Lonmin suggested that it expects to have strong fourth quarter of the financial year, barring any safety stoppages, with a "material increase in underground metal in concentrate output".

Nevertheless, the company's sales results will provide cause for concern, as platinum sales fell to 91,952 oz during the third quarter, with pgm sales dropping to 192,507 oz.

The main source of frustration for Lonmin has been its troublesome Number One furnace, which leaked again on 30th March, taking two months to repair.

Although the facility has been performing steadily for over a month, the firm revealed that it has pencilled in a reconstruction for November and December, its third in as many years.

Lonmin has developed a reputation for safety problems, which have caused a number of its mines and furnaces to be shut down, thereby limiting platinum production.

Despite these worries, the company announced that it still expects to meet its full-year sales target of 700,000 oz by sending material out to its rivals for refining.

Sources:

Lonmin Q3 sales halve, sticks to annual target (22/07/10)

Lonmin Platinum Production Slumps 47% After a Leak at Its Biggest Furnace (22/07/10)

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