Lonmin, the world's third-largest primary platinum producer, has hit its full-year sales target after production levels were restored following strike action in May.

Sales of platinum totalled 721,000 oz and the firm is targeting 750,000 oz next year.

Production was restored to normal in the fourth quarter of the year after illegal industrial action at the Karee operation in the previous quarter.

Total refined production for Q4 was 247,609 oz of saleable platinum and 464,275 oz of platinum group metals, a significant quarter-on-quarter increase of 48.4 per cent and 53.9 per cent respectively.

However, refined platinum and pgm production decreased by 17.9 per cent and 13 per cent respectively when compared to the previous full-year.

Lonmin said this is due to the inclusion of toll refined material in the prior year period of 77,368 platinum ounces and 106,112 pgm ounces as a result of the extended down time of the Number One Furnace in 2010.

Underground operations at Marikana produced 3.1 million tonnes during the fourth quarter of the 2011 financial year, an increase of 0.6 per cent from the same period of 2010.

"The increase was mainly as a result of Karee producing 9.5 per cent more than the prior year period as the operational momentum was re-established in the last six weeks of the quarter," the firm said in a statement.

Production at Westerns decreased by 83,000 tonnes, while output at Middelkraal decreased by 1.3 per cent against the prior period year, which Lonmin said was the result of "challenging ground conditions and mechanical breakdowns".

Overall, tonnes mined of around 3.3 million for the quarter, reflected a decrease of 83,000 ts, equivalent to a 2.5 per cent reduction compared to last year.

Chief executive officer Ian Farmer was upbeat about the miner's ability to continue to spend growth capital, according to Mining Weekly.

"We continue to believe that investing in production capacity is the right thing to do," he said.

The firm is looking to spend around $2 billion by 2015 to increase production to 950,000 oz/y.

"But if things deteriorate further, we'll have to think again. What will drive that is where we believe the overall average price for the year is going to be and what the year-end debt position of the company might look like in that circumstance," Mr Farmer warned.

He also told the publication that demand for platinum from China has increased over the last year.

Sources:

UPDATE 1-Lonmin hits FY sales target, prices boost earnings (14/11/11)

Lonmin will continue to spend growth capital, manage market volatility (14/11/11) 

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