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Lonmin

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									chapter 6       company listings

                                                                             DEtAiLS: Lonmin Plc, 4 Grosvenor Place, London, SW1X 7YL

Lonmin                                                                       Northdowns, 17 Georgian Crescent, Bryanston East 2152 | P O Box 98811, Sloane Park, 2152
                                                                             www.lonmin.com | contact@lonmin.com




            Lonmin iS thE worLD’S thirD LArGESt
                            PLAtinum ProDuCEr.


Go i n G u n D E r G r ou n D t oD Ay:
C u rre n t a ct iv it ie s a n d s t r u c t u res
Executive directors include Brad Mills (chief executive), Alan Ferguson
(chief financial officer) and Ian Farmer (chief strategic officer).
  Non-executive directors include Sir John Craven (chairman), Roger
Phillimore (deputy chairman), Peter Godsoe, Sivi Gounden, Michael
Hartnall, Karen de Segundo, Jim Sutcliffe and David Munro.
  Lonmin has two operating subsidiaries: Western Platinum Limited
(WPL) and Eastern Platinum Limited (EPL). Incwala Resources (Pro-
prietary) Limited (Incwala Resources), Lonmin’s empowerment partner,
has an 18% holding in WPL and EPL, while the other 82% is owned by
Lonmin. Through WPL and EPL, Lonmin operates a mining complex
at Marikana in North West Province and a mine in Limpopo Province
near Polokwane. The group also operates a smelter complex, base metal
refinery and precious metal refinery.
  Incwala Resources is a South African registered company specifically
incorporated for the purposes of enabling broad-based equity participa-
tion by historically disadvantaged South Africans (HDSA’s) in Lonmin.        rhodium and gold). Drilling continues        Hossy Shaft, Marikana
The International Development Corporation and Lonmin both own                at the property to extend resources and
23.56% of Incwala, with the remaining 52.88% being held by HDSA-             Lonmin is currently undertaking pre-
owned consortia.                                                             feasibility work and looking at an initial
                                                                             project size of between 400 000 and one
LookinG bACk:                                                                million tonnes per month.
Defining moments in the history of the company                                 Lonmin holds a 22% stake in Platmin,
In June 2005, Lonmin acquired the Limpopo mine – this operation pro-         a Canadian exploration company with
duced 50 404 platinum ounces in concentrate in the 2006 financial year.      PGM projects in South Africa, and has
In September 2006 Lonmin was notified by the Department of Minerals          numerous drilling projects and joint ven-
and Energy of the successful conversion of its old order mining rights       tures in Canada, Gabon and Tanzania.
into new order mining rights in respect of the Group’s Marikana opera-
tions. These rights entitle WPL and EPL to the exclusive right to mine for   thE wAy ForwArD:
platinum group metals (PGMs) and associated metals within the desig-         opportunities &
nated property boundaries for the next 30 years, with a right to apply for   challenges
renewal thereafter for up to a further 30 years.                             The supply of platinum remains con-
  In February 2007 Lonmin purchased a 74% interest in the Akanani            strained as it continues to be out-
PGM deposit in Limpopo province (Incwala Resources now owns the              stripped by demand. Platinum is an ex-
remaining 26% of the project). Akanani currently has an indicated and        tremely scarce commodity with around
inferred P2 (layers of the Platreef) resource of 254.7 million tonnes at     79% of the world’s known resources
3.88 gram per tonne (3 PGE+Au) and an inferred P1 resource of 109.9          in South Africa, the bulk of which is
million tonnes at 2.5 gram per tonne (3 PGE+Au: platinum, palladium,         located in the Bushveld complex.



16 8 DE E P S A A celebration of mining in South Africa
                                                intErEStinG               CurrEnt
                                                FACtS AnD                 FinAnCiAL
                                                FiGurES                   StAtE oF thE
                                                                          ComPAny
                                                Lonmin has opera-
                                                tions in the bushveld     Lonmin has a primary                    has incorporated a variety of additional
                                                complex in South          listing on the London                   safety, efficiency and employee-friendly
                                                Africa. ore is mined      Stock Exchange, and
                                                                                                                  measures into its new generation of shafts
                                                and concentrated          is a constituent of the
                                                before being processed                                            to improve the working environment for
                                                                          FtSE100 index, with
                                                through Lonmin’s                                                  its staff. Looking ahead, Lonmin is con-
                                                                          a secondary listing
                                                smelter and refiner-      on the Johannesburg                     tinuously investigating opportunities to
                                                ies to deliver finished   Stock Exchange. its                     modernise its operations and is on track
                                                metals to the market.     shares are also listed                  to meet its 50% mechanisation target at
                                                the group currently       in the united States                    Marikana by 2010.
                                                mines around 95% of       through an American                       The unique physical and chemical
                                                its production from its   Depository receipt                      qualities of platinum, palladium and
                                                marikana operations       programme. Lonmin’s
                                                                                                                  rhodium (such as their unparalleled
                                                on the western limb of    current market capi-
                                                the bushveld complex.                                             catalytic properties) create a variety
                                                                          talisation is around
                                                the Limpopo mine is                                               of industrial applications, the princi-
                                                                          uS$10 billion.
                                                situated on the north-                                            pal of which is as catalytic converters,
                                                ern side of the eastern   the majority of                         which reduce noxious emissions of
                                                limb of the bushveld      Lonmin’s shares are                     motor vehicles.
                                                complex in Limpopo        held by institutional in-                 During 2006 Lonmin saw a contin-
                                                province.                 vestors. nearly 60% of                  ued strong demand for platinum from
                                                                          the shares are held by                  the clean-air-legislation-driven autocat-
                                                At marikana, two          uk-based institutions,
                                                                                                                  alyst sector, which now makes up over
                                                platinum-bearing reefs    15% in north America
                                                (uG2 and merensky)                                                50% of the PGM demand and is still
                                                                          and 9% in Continental
  Therefore, the dynamics of the South          are mined simultane-                                              growing. Innovations such as bio-fuels,
                                                                          Europe.
African platinum industry are instrumental      ously in the lease area                                           hybrid engines and fuel cells are also
in striving to meet the increasing demand       over a strike length      the highlights of                       positive developments for the industry
for platinum and PGMs. In South Africa          of some 27 kilome-        Lonmin’s financial re-                  as these applications all require the use
production growth is dependent on the           tres, and currently at    sults for the year end-                 of PGMs in their autocatalyst systems.
                                                an average depth of       ing 30 September 2006
development of deeper mines, as producers                                                                           The jewellery platinum brand re-
                                                around 450 metres. un-    were a 141% increase
have already mined the majority of the more                                                                       mains strong and the aspirational qual-
                                                derground mining pre-     in Ebit to uS$842m
profitable and shallower deposits in the                                                                          ities of the product continue to play
                                                dominates, although       and a 163% increase in
Bushveld complex. Locating and exploiting       open-cast mining has
                                                                                                                  a major part in demand for platinum
                                                                          earnings per share to
new supply is dependent on the platinum         also been undertaken.                                             jewellery, particularly in China. This is
                                                                          312.1c. in addition, the
price remaining at a level that will induce                               company announced
                                                                                                                  despite the market’s ability to react to
investment in the development of mines.         in 2006 platinum          that it had sold over                   the metal’s price.
  Lonmin’s stated strategy is to capture        contributed 56% to        950 000 ounces of plati-                  The distinctive properties of other
and build growth; create a culture of safe      Lonmin’s revenue. it      num (1.8 million ounces                 PGMs and the strong demand for these
production, operational excellence and          continues to be the       of total PGms).                         metals from industrial applications
                                                primary driver of its
innovation; and to focus on the long term                                                                         mean that they are expected to play an
                                                business. rhodium
sustainability of the communities impact-                                                                         increasingly important role in Lonmin’s
                                                contributed 28% of
ed by Lonmin’s operations.                      revenue, followed by
                                                                                                                  long term growth opportunities. For
  In line with this focus on safe production,   palladium at 7%. All                                              example, ruthenium helps to add larger
operational excellence and innovation,          three of these metals                                             recording capacity on small hard disk
Lonmin has introduced mechanisation to          are used in the produc-                                           drives, whilst iridium is used in cruci-
its operations. Simultaneously the group        tion of autocatalysts.                                            bles for single crystal growth.



                                                                                                   D EEP SA A celebration of mining in South Africa      16 9

								
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