Lonmin Stockpiles Platinum to Prepare for Possible Strike
(Corrects company forecast in second paragraph.)
Lonmin Plc (LMI), the world’s third-largest platinum producer, returned to profit after output of the metal exceeded the company’s forecast and cost increases were below South African inflation.
Earnings were 31 cents in the year ended Sept. 30, compared with a 202-cent loss in the previous 12 months, the Johannesburg-based company said today in a statement. The median of 21 analyst estimates in a Bloomberg survey was for profit of 13 cents a share. While sales fell 1 percent to 696,000 ounces, they exceeded the company’s forecast of 660,000 ounces. Costs rose 3.8 percent, less than the 6 percent September annual inflation rate in South Africa, where Lonmin mines its metal.
“We regard our solid performance in 2013 as the foundation to build on,” Chief Executive Officer Ben Magara said.
Lonmin, a quarter held by Glencore Xstrata Plc (GLEN), cut capital expenses and raised $817 million from shareholders in the past year as it recovered from a six-week strike in 2012 during which at least 44 miners died, including 34 in a clash with police.
Lonmin forecast annual platinum sales of more than 750,000 ounces in the year through September, and said unit costs will increase by less than wage inflation. The company plans capital spending of $210 million this fiscal year, it said.
Magara, former head of engineering and capital projects at Anglo American Platinum Ltd. (AMS), took over as CEO on July 1.
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