Lonmin, the world’s third largest platinum producer, has decided to completely rebuild a furnace, following a leak in December, a process that will take 80 days.
”…The prior failures of the furnace have fundamentally compromised the structural integrity of the vessel and it is therefore not prudent to attempt to repair the furnace in its current condition,” Lonmin said in a statement on Tuesday.
A preliminary cost of $6,5-million (R45-million) has been attached to the rebuild, which, coupled with the lower refined production, will increase full year C1 costs at the company’s Marikana mine to between R2 650 and R2 700 per PGM ounce sold, according to the statement.
In the latest Lonmin annual report, the company states that the C1 cost per PGM ounce sold from the Marikana operations amounted to R2 441 for 2006 and the company was targeting C1 costs for fiscal 2007 for Marikana of around R2 450 to R2 500 per PGM ounce sold.
The company expects to produce 1,02-million to 1,04-million ounces of platinum in concentrate for the year, while sales are expected to be between 980 000oz and one million ounces.
First half sales are only expected to be between 300 000oz and 310 000oz of platinum ounces, with the second half sales expected to come in at 680 000oz to 690 000oz.
Lonmin says the rebuild and warm up should be complete around March 11.
To minimise the production and financial impact, it will run all three of its Pyromet furnaces for the remainder of the financial year to the end of September. The company says it will also have to slow down the re-commissioning of its Merensky furnace.
On December 18, Lonmin, which has a history of processing problems, said it had shut down the furnace after a leak occurred adjacent to one of the matte tap holes. – I-Net Bridge