- Plan to close shafts and cut jobs bearing fruit, CEO says
- World's No. 3 platinum producer can reduce costs further
Lonmin Plc said its South African platinum mines are breaking even ahead of schedule after it closed shafts and cut thousands of jobs, while earnings from exports have improved due to a weaker rand.
The world’s third-biggest platinum miner is meeting a capital and operating cost target of 11,200 rand ($691) per ounce for a basket of platinum-group metals, Chief Executive Officer Ben Magara said in an interview in Cape Town on Tuesday. That’s lower than the 11,300 rand it’s currently receiving for selling each ounce, he said.
The biggest producers are suffering from an almost 50 percent plunge in platinum prices in the past five years. Johannesburg-based Lonmin is restructuring its Marikana mines and has cut more than 5,000 jobs to help weather the rout. The plan, which also entailed raising about $400 million from shareholders, targeted breaking even by September 2017.
“We are actually there and thereabouts,” Magara said. “One swallow doesn’t make a summer. There are continuing moving parts,” he said, referring to exchange rates, metal prices and operating conditions. The company can reduce costs further, he said.
South African producers have benefited from the rand’s 28 percent slide against the dollar over the past year. That’s because they incur costs in the local currency while getting paid in dollars.