Lonmin Chief Executive Ian Farmer claimed yesterday (20th July) that pgm output at its flagship Marikana mine in South Africa could increase by up to 40 per cent.

The world's third-largest platinum producer revealed that 308,617 oz of platinum in concentrate were processed at the site during the first half of its fiscal year to the end of March.

Mr Farmer's predecessors established a long-term target of producing one million ounces at Marikana but he explained in an interview with Reuters that a smaller target is more realistic.

He told the news provider: "Marikana, as it's configured, probably an ideal number to run that business is more like 850,000 oz.

"I think hanging a one million-ounce-a-year milestone around its neck was not useful."

However, achieving production of 850,000 oz would still represent a 38 per cent increase on the latest half-year figures, on an annualised basis.

In addition, hopes are high that output will be augmented further by the creation of three new shafts at Marikana, which are on the verge of being ramped up to full production.

Mr Farmer commenced a major restructuring programme on his appointment last October but believes that the effects may take time to become fully apparent.

"Operational turnaround stories are not quick and I reckon it's a two-year programme, so we've probably got another year of ironing out wrinkles before we head in a more positive trajectory," he added.

Mr Farmer also refused to divulge longer-term production targets for the company, noting that details would be confirmed with the release of its full-year results in November.

Lonmin was the subject of an aborted takeover bid from Swiss diversified miner Xstrata last year.

Source:

Lonmin sees Marikana potential output up 40 pct (20/07/09)

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