Tailings Re-treatment Contracts for Chrome removal

Lonmin Plc

UG2 Tailings Re-treatment Contracts for Chrome removal

Lonmin Plc ("Lonmin" or "the Company") today announces that it has signed two separate contracts with the Xstrata-Merafe Chrome Venture and ChromTechfor the construction of Chrome recovery plants ("CRP's") to treat the current tailings from UG2 concentrators at Lonmin's Marikana operations. The contracts involve the construction of two CRP's, each of which will be built and operated by the Xstrata-Merafe Chrome Venture and ChromTech. Under the terms of the contracts, the Xstrata-Merafe Chrome Venture and ChromTech will purchase the Chromite concentrate produced from the CRP's, which are expected to be in full production by the second half of Lonmin's 2011 financial year.

The duration of the contract with ChromTech is approximately five years and they are expected to treat approximately 0.3 million tonnes of Chromite concentrate contained in the tailings feed per annum. The duration of the contract with the Xstrata-Merafe Chrome Venture is based on total volume treated, rather than a fixed time period, and is expected to treat approximately 1.5 million tonnes of Chromite concentrate contained in the tailings feed per annum.

In addition, Lonmin has commenced an initial design study relating to the construction of PGM recovery plants to recover PGM's from the UG2 tailings, following the removal of the Chrome. This process is expected to improve overall concentrator recoveries.

Ian Farmer, Lonmin's Chief Executive Officer, commented:

"These agreements mark the continuation of a trend across the industry as PGM producers look to realise value through Chrome by-product revenues and improved PGM recoveries".

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