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									                                            Lonmin
                                  Conference Call
                                       2 August 2005


                                Q3 Production Report

                                            Brad Mills
                                 Chief Executive Officer, Lonmin



I.     Preamble
Good morning, ladies and gentlemen, and welcome to our Q3 Production Report call. With me are
John Robinson, our Chief Financial Officer, and Alex Shorland-Ball, our Vice President of Investor
Relations. I would like to start by making a few brief comments, and then John will make a
comment or two on costs. We will finish by opening the call to questions.

II.    Improvement in Production
During the quarter to the end of June, refined production has been increasing as we have switched
our mix away from our higher-cost opencast Merensky ore to lower-cost underground ore. We
have continued to implement the experience gained following last November’s smelter accident,
and the smelter has continued to perform strongly during the quarter; it is actually achieving new
records almost every month as we have gone forward. This improvement in production has been
achieved while at the same time controlling our costs, and we are pleased today to reduce our
full-year cost guidance to around R2,450 per PGM ounce sold from the Marikana operations.

As you know, we finished the end of the first half with substantially higher than normal working
capital outflow, which related primarily to the build-up of stocks of concentrates that were not
smeltered during the nine weeks the smelter was out of action following the accident. The
smelter’s strong performance has helped us substantially reduce these concentrate inventories and
has created higher than normal material flows in our base metals and precious metals refineries.
We are now forecasting that we will not be able to fully process all of this extra material before
year end, which will result in somewhat higher than normal year-end stock positions. We expect
the situation to be fully reversed in the first quarter of next fiscal year. We have therefore revised
our full-year production figure to around 910,000 ounces of platinum; this forecast contains a
contribution from our Limpopo division of around 10,000 ounces during this fiscal year.

III.   New Era Labour Agreement
On 21 June 2005, we announced that we signed a New Era Labour Agreement (NELA) with the
National Union of Mineworkers (NUM), Solidarity and UASA, the three unions representing our
workforce. This innovative agreement is for five years and limits basic wage increases to South
African CPIX. Employees also participate on an equal basis in a bonus pool made up of 25% of
gains achieved over certain targets for production and costs in the year. There is, in addition, a
Conference Call                                                                                Lonmin


safety bonus element of the gains share, which is calculated per employee and which reduces
should the business suffer any fatalities. The agreement also equalises a number of historical
discrepancies in employee pay across our operations that existed between the three mines at
Marikana and our smelter. This equalisation programme will equate to a one-off cost of
implementing the New Era Labour Agreement in the first year, our fiscal year 2006, of 2.9% over
the CPIX.

As you will have seen, we have reported for the first time a contribution from the Limpopo division
for the period from 15 June 2005, when we took control of the asset. The integration of Limpopo
continues to progress well. We have now owned the asset for six weeks, so it is still early days in
terms of updating you on our progress and plans, but we are pleased with the early performance of
the asset, which we forecast will contribute around 10,000 ounces of platinum to our production for
this year. We will obviously give full details of progress with Limpopo at the time of the final
results.

IV.     Summary
I am pleased with how production has picked up during the quarter and the continued strong
performance of our smelter. We now expect production for the year, including Limpopo, to be
around 910,000 ounces of platinum. We have continued to control our costs carefully during the
period and, again, we have lowered our cost guidance to around R2,450 per PGM ounce sold for
our Marikana operations.




                                   Reporting of Costs

                                         John Robinson
                                 Chief Financial Officer, Lonmin


Those of you who have followed us for a while will recall that we have traditionally valued the
stock on a tonnage basis, which has in the past caused distortions where in different periods we
have processed low- and high-grade concentrate. In the second half of this year, we changed that
basis so that we will in the future be valuing it on an ounce-contained basis, which will obviously
eliminate the distortions that have previously been caused. This may be one of the reasons why
certain people were looking for our costs to be perhaps somewhat lower in the second half than in
the first half because, given the problems we had with the smelter in the first half, we did, in fact,
process the higher grade concentrate first. That has caused a degree of distortion but will not from
next year onwards, as we will be doing it on a contained ounce basis.




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                              Questions and Answers

Steve Sheppard, JP Morgan

There has been a lot of noise in the media about some sort of disagreement with the National Union
of Mineworkers over the New Era Labour Agreement. Could you please clarify the status? Is the
agreement in force? Are there any disputes?

Brad Mills

We followed a very extensive period of consultation and bargaining with our three unions leading
up to the signing of the New Era Labour Agreement, which occurred on 21 June 2005 and was
done with NUM’s full knowledge. I think there are currently some internal difficulties at NUM in
terms of how they want to proceed in the changing wage environment in South Africa. To some
extent, we have been a bit caught up in all of that. Our view is that, rather than engage in any
public press debates about any of that, we should proceed on the basis that we have a legally
binding, signed agreement with NUM and our other unions. We are in dialogue with NUM around
certain clarifying issues that they have, which is typical at this stage with an agreement of this
nature. We believe that the agreement is both legal and soundly constructed and will withstand any
tests. It is very much built on a spirit of cooperation with our workforce and their engagement. I
think while a lot has been thrown around in the press, we really do not think that it has much
bearing on the actual facts in the case.

Clearly, the wage environment in South Africa is at present very challenging; I think we will
probably see potential strikes in the gold sector, and Amplat also seems to be a bit stalled. The
classic case in which inflation is coming down very rapidly and bringing down the expectations of
the workers around wage increases has been challenging for the whole country, and so we are a bit
caught up in the wage season. There have been strikes at South African Air and Pick ’n Pay; this is
part of all that background, and I think that really contributes to the noise. Our view is that we
have an agreement, which is binding, and we are implementing it. There has not been any real
agitation in the workforce around it; they seem actually quite comfortable, so we are just moving
forward.

Steve Sheppard

Are you able to talk to us about the kind of issues that are being disputed? I know that may be
sensitive.

Brad Mills

They are really not disputes. We are working through some clarifications with NUM on how the
gain sharing programme works, which is a new concept for all of South Africa, and they are rightly
interested in how it is going to work and be implemented going forward. There are two clauses in
the agreement that have to do with what happens if the gain share programme does not deliver
certain results, allowing wage re-openers in the second and fourth year of the agreement. Those are
the issues that required some clarification.




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Jason Fairclough, Merrill Lynch

At the time of the Southern acquisition, you had envisaged some major redundancies there. Is that
still going to be the case? Are those redundancies allowed under the approval you were given?
Secondly, will there be any tax effect from the $10 million and $13 million items that were
mentioned?

Brad Mills

As part of the conditions of approval from the South African Competition Commission, we gain the
right to implement immediately up to 300 redundancies. Some of these have happened, and more
will continue over time, particularly as we continue to build up our mechanisation of the operation.
That is well in hand, and we are moving forward.

John Robinson

The $13 million was either in the Southern Platinum or Messina and was allowable for tax. There
will not be any profits to offset them against this year, so the effect will be carried forward as part
of their losses going forward. The $10 million is the provision in Western, which will obviously be
tax allowable.

David Butler, Cazenove

My questions concern the inventory backlog. Can you give us a clear idea of what the underlying
production would have been if that inventory had gone through? What does the underlying growth
in cash flow look like pre any adjustment for the falling grade in that inventory?

Brad Mills

It is a bit of a question mark at this point. We would have been close to the 920-925 number if we
had been able to get everything through. While we have tried hard to catch completely up from the
smelter accident, when you lose nine weeks at the beginning of the year it is difficult to get it all
done. We have found a few more bottlenecks in our system; as we have done really well with the
smelter, we have found some more downstream from that. That is probably what would have been
expected.

In terms of the underlying costs, this has been very much a transitional year because of the smelter
incident, a number of redundancies and one-offs, the implementation of the NELA, and things like
that. It is a messy cost base at best, when you look at this year. I think we will have a much better
view as we get through the budget process we are just undergoing in terms of looking forward, and
we will give guidance at the full year in terms of next year’s cost numbers. That will give you a
better sense of what we think the cost structure should look like going forward. I am a bit hesitant
to pin that down right now, given that we have not completed that work.

David Butler

Could you give us an idea of the opencast/underground production split in terms of ounces?




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Brad Mills

I think it is in the Production Report. You are seeing the fairly rapid slow-down in opencast
production. We are approaching the end of that, so it is declining fairly rapidly. This year and next
year are our transition years from opencast production to full underground support at Marikana.

Garry Pierson, Deutsche Securities

Could you quantify the value or the moves in stock that we might see at the year end, assuming
metal processing stays the same, and relating to your change in policy on how you are going to
value your stock?

John Robinson

We said that we were aiming to reverse completely the outflow that we had shown in the first half.
Obviously, we are not going to quite make that. Where we precisely end up, I would have thought
you were talking around something in the order of $20 million or so likely to be there, which is a
little higher than would normally be there.

Dave Mallalieu, BNO Nesbitt Burns

Did I understand correctly that your inventory in stock right now is $20 million?

John Robinson

No. I did not mean you to understand it that way. The level would be $20 million higher than we
had indicated to you at the half year. We indicated that we would reverse the whole of the increase
in the first half.

Dave Mallalieu

With regards to the actual magnitude of the inventory in stock right now, can you indicate what that
would be at the end of this quarter?

John Robinson

We do not publish those figures at the end of a quarter. It would be on its way down from the level
it was at the end of March.

Dave Mallalieu

It was 177 at that point. Would it perhaps be a good assumption if it was around 110?

John Robinson

At the end of June, that sort of order would not be unreasonable.




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Dave Mallalieu

With an inventory of that magnitude, do you have the capacity to run through that, with your
current production on top of that, by the end of September?

Brad Mills

The smelter is not the issue at this point. We have done a very good job in the past couple of
months of catching up all of the concentrate stocks, so at this point the smelter is almost operating
fully on concentrates produced from the mines. In getting that inventory through the smelter, we
have created a fairly large excess material flow into our base metals refinery and precious metals
refinery. It is therefore getting that rabbit through the snake; it is the back end of it that is a little
bit plugged up right at the moment.

Dave Mallalieu

You are thus putting it through that base metal refinery, given that there is quite a time flow
between you getting the recognised prices. Would it perhaps then take a bit longer than December
before you recognise all that revenue?

Brad Mills

No, most of it will be produced in October. It is usually about a month in terms of completion of
inventory.

Dave Mallalieu

With regards to your capital expenditure programme, what is remaining for the rest of this fiscal
year, and what is your plan for 2006?

Brad Mills

We look to be pretty much on target for our planned capital expenditure programme; we manage
pretty much to the actual number in terms of capital. It looks like it will be achieved as per our
guidance to the market. We are in the budgeting process and are going through our capital
programme for next year, which still needs quite a bit of refining. I do not have a good number for
you for next year, particularly as we need to incorporate our thinking around Limpopo and some
de-bottlenecking in our metallurgical plants to accommodate further growth.

Dave Mallalieu

Limpopo was planned to be 75 million over three years, so dividing that by three is obviously 25,
but might that actually slow down a bit?

Brad Mills

As an order of magnitude, that is probably not a bad number. I am not sure what the timing of that
spend it going to be; it is probably not quite that even.




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Dave Mallalieu

Limpopo has had a problem with distribution of long hole versus down dip. What are you at now?

Brad Mills

Obviously, it has not changed too much since the re-start. We are in the process of migrating it
quickly over the next 18 months to all long hole.

Dave Mallalieu

The last report they had was that only 10% was long hole. Is that still appropriate?

Brad Mills

That is probably still close. It is going to shift fairly rapidly over the next six months to about 50%;
it will tail off after that.

Mark Smith, Royal Bank of Canada

We see now that you are accounting for Limpopo. If I am right, there is an agreement with Impala
that they are going to receive a fixed quantity of concentrate over the next 16 months. Could you
quantify how much that concentrate would be? Secondly, does the R2,450 per PGM ounce include
or exclude the royalties? Finally, before the Southern Platinum acquisition, you said you were
going to condition markets for a dividend profile from the free cash flow. Is that still intact?

Brad Mills

Your assumptions on the Impala concentrate contract are right; I think it is for a fixed quantity of
ounces over that period, which I think is 65,000 ounces of platinum.

John Robinson

It was at the rate of 45,000 per year.

Brad Mills

Once that is fulfilled, then that contract is fulfilled. We are currently planning to have that done by
June of next year. That should be handled by that point in time. Secondly, I think it is early days
to have a good view on costs. I think our guidance was around R4,000 per PGM ounce. Finally,
the dividend is effectively based on free cash flow, but at a stable rate, even if it is slightly above or
below the number at which we are currently dividending.

Steve Sheppard

What are your intentions for your corporate office? You allude to some restructuring there.




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Brad Mills

We have our shared business services restructuring, which is going on in South Africa, but that
does not impact corporate.

Steve Sheppard

Sorry; that was the wrong use of words. I meant what you said.

Brad Mills

As we indicated to the market, we will be implementing a shared services business model as we
complete the end of this year. In fact, we have a big meeting later this week to go through the final
details of that. The team have been working hard on that. That is what is put aside in that one
$10 million redundancy provision because we do see that we will have a number of people who
will become excess to needs as a consequence of that reorganisation. Again, we are consolidating
all of the services on the mine that have historically been distributed between the three mining
operations and the metallurgical operation. That is part of a streamlining process and cost
management effort that we are going through.

Steve Sheppard

Could you tell us your latest thinking on diversification, or not, as a strategy?

Brad Mills

Our view right now is that we have our hands full with our growth programme in Marikana and
with Limpopo; a fair bit of work is needed to achieve the growth profile. We continue to look for
other acquisition opportunities inside the PGM space, which we continue to like a lot. We have not
been doing a lot outside of that at this point in time, or thinking too hard about it; our view is that
commodity prices in a lot of the other sectors are not terribly attractive at this point in time, and we
have plenty of good, solid growth to achieve inside the platinum group. I think that is where we are
going to be focusing over the next couple of years. Beyond that, I will reserve judgment to see
what happens with the overall space.

Mark Smith

Your capital expenditure on the Limpopo Voorspoed mine is $75 million. Are you intending to
deepen the shaft to 730 level, or will you continue with the spiral decline that is currently there?

Brad Mills

I think the guys feel that using the spiral decline looks like a better approach at this point in time. I
think that is where we will go: we will use the mechanised spiral decline approach to access the
lower levels and not deepen the shaft at this moment. I think everyone is comfortable that will
work very effectively. That is where we are headed at the moment.




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