29th Jan 2008 16:13
Lonmin PLC29 January 2008 Update on South African Power Situation On Friday 25 January 2008, Lonmin received a communication from Eskom confirmingthey had declared force majeure and requesting that Lonmin reduce powerconsumption at its operations to the minimum load. In order to ensure the safetyof our employees and to comply with Eskom's request, production from our miningand concentrating operations was stopped from 10.00 am on Friday morning withonly critical safety systems remaining operational. Our smelting and refiningoperations continued to operate on reduced power with a resultant drop inthroughput. Following a meeting with key customers this morning, Eskom has confirmed thefollowing: • that it will be lifting the current force majeure; • we can increase power supply at our operations to a maximum of 80% of the typical load profile with immediate effect; • it is envisaged that power supply will increase to 90% of the typical load later in the week; • that it will guarantee at least four hours notice of any future load shedding; and • that it will take four weeks to fully stabilise the power supply network. We are now in the process of restarting our mining and concentrating operations.In total we estimate the production lost during this power related shutdown willbe around 15,000 saleable ounces of Platinum. Given the reduced levels of concentrate in our stock pipeline and in order tomake optimal use of the reduced power supply in the short term we have broughtforward our planned maintenance shutdown of the number one furnace previouslyscheduled for February. The furnace is now offline and is currently expected tobe down for three weeks. During this period we will run our Merensky furnace. Going forward, Eskom has requested all customers to reduce their powerconsumption by 10% of the typical load for the foreseeable future. In the lightof this we will be reviewing our operations to see how we can best maximise ouroutput under this power constraint. It will take time to fully assess the futureproduction implications of this power reduction. PGMs are globally strategic metals for a number of crucial applicationsworldwide. Given the importance of South Africa's role in the PGM market, thesecurity of power supply remains a strategic issue for the industry. We arecommitted to improving our power efficiency and to working with Eskom and theSouth African Government to ensure the power necessary to produce the PGMsneeded to meet growing global demand. Enquiries: Alex Shorland-Ball +44 (0)20 7201 6060Vice President,Investor Relations & Communications This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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