Lonmin says 2011 sales are on track

City A.M. Reporter
PLATINUM producer Lonmin said operating profit more than doubled in the first half and reaffirmed its closely watched 2011 sales guidance, provided it can avoid safety stoppages that have hampered production.

Analysts had been concerned that the group could cut its 2011 target of 750,000 platinum ounces after it suffered increased safety stoppages, like many rivals in South Africa, and reported six employee deaths in the half-year period.

“If we have unforeseen stoppages in the second half that will make our target more difficult, but at this stage we are prepared to reiterate our guidance for the full year,” chief executive Ian Farmer said.

Section 54 of South Africa’s Mine Health and Safety Act allows inspectors to halt operations at a mine pending measures to ensure safety.

Lonmin, the world’s third-largest platinum producer, said it was on track with sales of 318,306 ounces for the six months.

It raised its longer-term target to 950,000 ounces for 2015, from 850,000 ounces by 2013.

It also stuck to 2011 guidance on costs, despite a 12.8 per cent jump in rand unit operating costs over the first half. It expects costs for the full-year to come in at eight per cent.