Platinum producer Lonmin on Monday reported an operating loss of $1.079 billion for the year to September 2017 after a loss of $322 million the previous year, citing tough macroeconomic conditions among other challenges.
The company said the platinum group metals (PGM) pricing environment had remained weak during the year, and markets were likely to remain subdued in the short-term.
"Persistent adverse macroeconomic conditions and inflationary cost pressures continue to affect the entire mining industry in South Africa," it said.
The company produced 10.1 million tonnes during the period, little changed from 10.3 million tonnes in 2016. Output was at 6.9 million tonnes from its three core Generation 2 shafts, up 7.1 percent from 2016.
Lonmin said it was hamstrung by its capital structure and liquidity constraints, but added that its announced combination with Sibanye-Stillwater would provide a stronger platform for shareholders.
"The operating environment remains tough, and we are planning on the basis that it will remain so for the foreseeable future," it said.
Unit costs would remain under pressure in the 2018 financial year and were expected to be in the range of R12,000 to R12,500 per PGM ounce.
Lonmin, listed on both the London Stock Exchange and the Johannesburg Stock Exchange, is one of the world’s largest primary producers of PGMs, which are essential for many industrial applications, especially catalytic converters for internal combustion engine emissions, as well as their widespread use in jewellery.
Lonmin’s operations are situated in the Bushveld Igneous Complex in South Africa, where more than 70 percent of known global PGM resources are found.
- African News Agency (ANA)
