Lonmin Cuts Production, Freeport Slashes Jobs
Lonmin cuts production, Freeport slashes jobs
LONDON-based platinum producer Lonmin has announced it will reduce output, cut jobs and place growth projects on care and maintenance, in response to the falling platinum price.
Chief executive officer Ian Farmer completed a review since being appointed to the role just six weeks ago.
'Today we are exercising producer discipline by announcing that we will close those portions of our operations which are uneconomic and cut back on capital expenditure,' he said.
Open pit mining at the Marikana mine in South Africa will be suspended, while the company said its Limpopo mine is 'uneconomic'.
The company said it is consulting with the Limpopo workforce and unions over the future of operations there.
Lonmin said it will halve exploration expenditure and put all growth projects on care and maintenance.
The workforce at the company's London office would also be reduced by a third and there will be a freeze on recruitment.
'The combination of these actions will ensure that Lonmin maintains its sound financial position and remains well placed to weather the current challenging PGM market conditions and to exploit the upturn when markets recover,' Farmer said.
Platinum was at $US2276.10 an ounce at the start of March, but was last trading at just $US823.70/oz.
At the end of October, the precious metal dropped to $US797.20/oz.
Shares in Lonmin closed 13% down on the London Stock Exchange to £7.24.
Last week American producer Freeport-McMoRan Copper & Gold announced it will cut production at its Henderson molybdenum mine in Colorado by 25% and plans to defer the restart of operations at its Climax molybdenum mine, also in Colorado.
Bloomberg reported that the company has sacked 691 workers, just over 5% of its US workforce.
Shares in the company dropped nearly 7% to $US20.24 on the New York Stock Exchange.
The Phoenix-based company's shares have taken a battering this year, after trading at $US127.24 in May.
