Lonmin is the third largest primary producer of Platinum in the world, producing over 900,000 ounces of Platinum and a similar number of ounces of the other Platinum group metals such as Palladium and Rhodium. Its operations are located in the district of Marikana, near Rustenberg, in the North West Province of South Africa.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 30/09/2005)

Platinum extraction: 100%

Mining Weekly - 21 October 2006

How platinum No 3 took No 1 spot in rights conversion race


The recent spate of prospecting and mining rights conversions from old- to new- order rights, including, in the last week, conversions for platinum producer Lonmin, diamond-miner De Beers and uranium exploration and development company sxr Uranium One, may have alleviated some of the concerns surrounding the conversions of minerals rights, but for others, contention still lingers.

Since the implementation of the Mineral and Petroleum Resources Development Act (MPRDA) in 2004, which placed custodianship of all mineral rights in the hands of the State rather than private mining companies, criticism has arisen over the apparent delays in processing conversion applications by the Department of Minerals and Energy (DME).

Chamber of Mines statistics indicate some 8 420 conversion applications were received between May 2004 and July 2006, of which 15% have been approved, 27% have been rejected and 55% are still pending.

However, when director-general Adv Sandile Nogxina told audiences at the Africa Down Under conference in Perth earlier this year that a new DME geographical-information-system-based cadastral system had been established to process licensing applications, he said that only 7% of applications had been delayed according to the latest assessment.

He also offered his assurance that the new system would lead to faster turn-around times for the processing of prospecting and mining applications and announced that mineral rights would be granted to mineral explorers within six months from the date of application, while mining rights would be granted within 12 months.

Nogxina attributed the 'teething problems' that had arisen with the implementation of the charter to the lack of a common interpretation of the law. He also said that during the first years of implementing the legislation, the DME requested that applicants supply information to supplement their applications, a process that would create the impression of delay.

He added that workshop-based assessments of the situation had shown congruence and a notable improvement in the quality of applications received.



Praise for Lonmin

At the recent announcement of Lonmin's conversions, the DME praised the company's conversion and Minister of Minerals and Energy Buyelwa Sonjica said that the company was a model to be followed, even by its larger rivals, Anglo Platinum and Impala Platinum.

The South African government had converted the old-order mining rights of Lonmin's Marikana operation to new-order mining rights, making Lonmin the first platinum producer to acquire the necessary conversions. The company's South African operating companies - Western Platinum and Eastern Platinum - are now entitled to mine the property in question for the next 30 years, giving Lonmin the right to apply for a renewal for another 30 years thereafter.

Sonjica said that Lonmin's rights conversions are proof that the new mining legislation is working, adding that the granting of mineral rights provides fertile ground for government to achieve its ambition to develop a competitive mining industry that benefits the people of South Africa.

But what lessons could Lonmin offer the rest of the industry? Two key lessons, it appears, are that as much attention has to be given by miners to the other pillars of the mining charter as to equity owner-ship, while the approach taken should be responsive rather than adversarial.

An example was Sonjica's praise of Lonmin's social and labour plans implemented, while Nogxina applauded the company's proactive approach in engaging with the department on its programmes.

The MPRDA has been pivotal in transforming South Africa's mining industry through the introduction of the broad-based socioeconomic empowerment charter. The charter outlines the creation of employment and the advancement of social and economic welfare through appropriate resource use. It also sets a framework to ensure that mining rights holders contribute towards the socioeconomic development of the areas in which they operate and targets a 26% ownership of mining companies by historically disadvantaged South Africans (HDSAs) by 2014.

Lonmin said that Western and Eastern Platinum had committed to certain undertakings within their social and labour plans and would be fully compliant with the South African Mining Charter within the agreed timeframes. CEO Brad Mills said that the company was committed to working with the DME to satisfy the undertakings made in its social and labour plan.

Sonjica expressed her satisfaction that the project Lonmin identified is in line with government's existing social development projects in the area of operation, one that is characterised by high levels of poverty and unemployment. She added that these were sustainable projects that would support communities and improve the individual's quality of life.

Mills expressed Lonmin's total commitment to transition in South Africa, and said that the company was committed to working with the DME to satisfy the under-takings made in its social and labour plan, achieving the company's objectives of trans-formation and empowerment.

The company's corporate social investment strategy has achieved distinction, particularly for its R700-million programme to eliminate hostel accommodation at its local mines and replace them with 6 000 employee-owned homes over the next five years.

South Africa's mining industry is infamous for its creation of single-sex hostels which house migrant workers from the rural areas. Particularly prevalent during the apartheid era, hostels are associated with social and health problems, including the spread of HIV/Aids and tuberculosis.

The plan was initiated following Mills's interrogation of the mineworker-housing situation over the past 18 months, during which he spent a night at one of the hostels himself.

He asserted that the current facilities have no place in a company with ambitions of being a modern, progressive enterprise and commented that the long-life orebodies in South Africa need a new approach to community relations and a strong emphasis on education.

He said that South Africa's mining paradigm needed to shift from the exploitation of low-cost, imported labour, to one with a stable and skilled workforce.

Lonmin engaged the services of the Desmond Tutu Peace Foundation over the past year in an effort to better understand employee and community needs. His efforts are now being translated into corporate social-investment programmes that focus on education, healthcare, leisure and housing.

In particular, Lonmin is committed to making a difference in education, a keystone of economic and social prosperity. Together with the Department of Education, the company plans to invest some R65-million over the next five years to improve education in and around Lonmin's mines in the North West and Limpopo provinces.

Sonjica urged South African platinum-miners to work hard to comply with the country's new legislation, citing Lonmin as an example. Now that Lonmin has done it, I hope the other local platinum majors will follow suit, she said.

Nogxina commented that Lonmin had fully met South Africa's legislative requirements and that the DME had met with other producers to ensure their compliance. The situation is simple: comply and you will convert, he asserted.



Other platinum producers criticized

The minister was less pleased with platinum giants Anglo Platinum and Impala platinum and expressed her disapproval at the slow progress that the two major local platinum-miners were making in complying with the country's new mining laws.

Both declined the opportunity to comment on Sonjica's statement, but Anglo Platinum's Simon Tebele says that the company understands what is expected of it in order to acquire new rights and has submitted its applications to the DME. He admits, however, that certain clarity issues over details in the legislation had arisen.

Anglo Platinum has had several disputes with the DME over the interpretation of the MPRDA and is currently pursuing legal recourse against the department in an attempt to seek clarity on certain rights issues. The platinum giant resorted to legal action over the DME's refusal to grant four prospecting rights to the company.

Anglo Platinum's head of legal services, Leon Bekker, says, We've gone to great trouble to under-stand what the law requires and the applications we have filed for conversions comply with these.

From a legal perspective there's no question about the security of tenure in respect of our existing mining operations. The DME acknowledges in many public forums that they don't have the discretion to refuse these conversions. Bekker says that the DME has a vision of what it wants to see in terms of black economic empowerment in the platinum industry and is looking for ways that companies such as Anglo Platinum can help to achieve this. We're trying to see what they want and whether we can accommodate it, he comments.

Bekker points out that, unlike other mining companies that have created a lot of new BEE share-holders by transferring the 26%stipulated by the mining charter by way of equity, Anglo Platinum does not think that this will really achieve the empowerment objectives of the MPRDA. He says that the Act wants to see the active involvement of BEE partners in the mining operations rather than passive dividend receivers. Unfortunately, that makes the empowerment process more complicated, he says.

The definition of what empowerment is has been bedevilled by the MPRDA and the charter, which are not talking to each other, he asserts, explaining that the definitions of what constitutes a previously disadvantaged person (PDP) or an HDSA differs. While the HDSA percentage requirements in the charter are readily achievable, Bekker emphasises that it is relatively easy to clothe a company with HDSA status while a meaningful and substantial portion of the benefits from that company may very well not end up with individuals who are PDPs as required under the MPRDA. The charter requires that 26% of mining assets are sold to BEE stakeholders and, rather than selling shares, Anglo Platinum has sold and is selling its rights to minerals in projects and also interests in the rights to minerals and assets of operating mines.

Bekker says that, regardless of the structure, Anglo Platinum contracts ensure that both the BEE objectives of the MPRDA and the 26% charter requirement are complied with so that a meaningful and substantial interest in the mining assets and the benefit there from end up with HDPs. I think this has made us different from other companies, he posits.

Achieving BEE requirements is more of a how than a what question, quips Bekker.

The DME's refusal of four of Anglo Platinum's new prospecting rights applications is mainly based on the company's lack of compliance to carry out the requested BEE participation in the proposed prospecting projects for which the applications were made. However, Bekker points out that, in the case of prospecting rights, the BEE request is just that, a request, and not a compulsory requirement.

He adds that the refusal has no effect on the company's conversion applications. The problem with the refusal by the DME is that it hampers our ability to plan properly and to optimally exploit the resources that we have, with respect to other operations.

Certainty comes with time. Maybe, as the DG has said with respect to the litigation, the positive implication of the pending litigation is that the courts should clear up what the legal position is and then we will all know, says Bekker.



Rights granted

Not all mining companies are frustrated with the department on the conversions front, however.

Gold producer AngloGold Ashanti, like Harmony, has been awarded its new-order mining rights.

AngloGold Ashanti public affairs manager Alan Fine tells Mining Weekly that the company recognises the conversions process for what it was - a new area of activity.

In this respect, he says that it has been a learning curve for AngloGold Ashanti and the DME, which had been in consultation over conversions since 2003 and continue to engage with each other.

Following a redraft of its social and labour plans, AngloGold Ashanti received its new-order mining rights in August last year, within one year of submission, in July 2004. In two areas, the requisite notarial agreements have been finalised in the first and will be finalised in the other shortly. We are committed to the targets and are comfortable with the spirit of the mining charter, asserts Fine, adding that the company never took a legalistic approach to the charter, but approached rights conversions in the spirit and attitude of a process of transformation.

He acknowledges that the process has taken longer than the DME envisaged and that the new legislation is not always explained in an investor-friendly way, but asserts that the department did not require anything that was impossible to give and did not make sense in terms of good management practice.



Legal issues

Webber Wentzel Bowens partner Manus Booysen points out that the new legislation is characterised by certain shortfalls and a lack of clarity.

He says that the new mining law regime is a quantum leap from the previous one, which was a regulatory process and licensing process related to private property law. While the role of the State was originally limited to regulating the exercise of prospecting or mining rights, the State now grants and regulates rights to mines, which are under the jurisdiction of the DME.

He points out that the department places a strong emphasis on BEE, which may be beyond what the Act requires in some cases.

While mining rights conversion applications require a statement and description of how the stakeholder will give effect to the BEE component of the mining charter, no BEE transaction is required for the conversion of prospecting rights.

This makes sense, since exploration activities are expensive and small new businesses can seldom risk funds on exploration.

In practice, however, Booysen says that the DME sometimes requires detailed binding agreements for conversion of mining rights and is not always prepared to grant conversions on the basis of memoranda of understanding or other agreements.

He says that the DME sometimes takes a negative view of dilution provisions in agreements and lock-in periods. Although it is common for shareholder agreements to stipulate that the BEE shareholder must retain shares for a minimum period . . .the DME says that BEE companies must be allowed to realise the value that they've achieved from the transaction. Booysen points out that this can make it difficult for mining companies that must remain BEE-compliant in terms of the MPRDA, since the company is not protected in the event that the BEE partner decides to sell. At this point, the company would then have to sell a further 26% in order to remain compliant.

He cautions that although every-one in South Africa and in the mining industry understands that BEE is essential to build the new South Africa, to take the requirements too far will ultimately become counter-productive. It becomes almost impossible to structure transactions that are acceptable to the DME and it delays the whole process, comments Booysen.

He concludes that, in light of the current commodity boom, it would be in the interests of the economy and the country, if the granting of new-order rights could be expedited.

Big fall last week this is in danger of dropping to 250p

Chart looks better now.

The bounce is back on..!

If it manages to break 1200p its all the way to 1400p.

any views on how far this will drop? all the way to 9???

Maybe the price of platinum will rise,due to the economy of India...(Hopefully).

StockMarketWire.com
Platinum producer Lonmin's third quarter production was hit by two fatalities in April and illegal industrial action at the Karee operations in May.

Lonmin says it has made good progress in restoring production and expects to be back to normal operating levels by August.

It adds: "Considerable progress has been made with the safety initiatives.

"We continue to intensify our focus on these initiatives and our LTIFR (lost time injury frequency rate) has fallen during the quarter from 5.4 at the half year to 5.1 as at 30 June 2011."

Overall, tonnes mined of 2.5 million for the quarter, reflected a decrease of 168,000 tonnes, equivalent to a 6.2% reduction against the prior year.

But it says that year-to-date, underground tonnage mined and milled is up on the comparable prior year period and its metals in concentrate has also increased.

Ex-divi wed 11th Jan 2012 (15¢)

South African police shoot dead striking miners

MARIKANA, South Africa | Thu Aug 16, 2012 11:56pm BST

(Reuters) - South African police opened fire on striking miners armed with machetes and sticks at Lonmin's Marikana platinum mine on Thursday, killing at least a dozen men in scenes that evoked comparisons with apartheid-era brutality.

In the incident, filmed by Reuters television, officers opened up with automatic weapons on a group of men who emerged from behind a vehicle and started loping towards police lines.

This is disgraceful and very uncaring of Lonmin, showing no sympathy for the dead... the workers should just quit as the company show no respect.



Lonmin tells striking South African workers to return to work or risk losing their jobs


FTSE 100 miner Lonmin has ordered employees at the South African mine where 34 workers were shot dead to return to work or risk losing their jobs.

Lonmin said that the ultimatum is a “last opportunity to return to work” for the 3,000 employees who took part in strikes that led to some of the worst violence seen in South Africa since apartheid.

A total of 44 people have died due to the violence at the Marikana mine, with 34 shot by police.

The violence stemmed from a rivalry between the militant Association of Mineworkers and Construction Union and the National Union of Mineworkers, which has ties to the ruling African National Congress.

Workers said the order from the company is an “insult”.

The chart clearly shows the company is in trouble even before this massacre of its workers. SELL.

Quarter of Lonmin mine strikers return to work following massacre


A quarter of the workforce have returned to the Marikana platinum mine in South Africa where 44 men were killed last week.

Mine-owner Lonmin threatened about 3,000 striking workers with dismissal if they did not show up at Marikana, 100km northwest of Johannesburg.

The mayhem was sparked by a spreading battle for membership between the NUM and the Association of Mineworkers and Construction Union, which has accused its rival of caring more about politics and personal enrichment than workers.

Investigators appointed by President Jacob Zuma, who has declared a week of mourning, are expected at the mine.

Lonmin, the world's third-largest platinum producer, said in a statement that, with unions, it would address a news conference this afternoon "in a bid to attract people back to work.

It said 27.3% at the Marikana mine, which employs 28,000 people, had returned to work.

Does the management of Lonmin think they can treat people like slaves?

Think again.

Lonmin will collapse if they do not appease the miners.

£6 has been support before.

In answer to hlyeo's post #30, it's not a simple as it seems and it looks like there are a number of vested interests distorting the picture to make it look like a simple management/worker dispute.
Reuters "Some workers belong to the Association of Mineworkers and Construction Union (AMCU), whose bloody turf war for members with the dominant National Union of Mineworkers (NUM) was the backdrop to Thursday's killing of 34 striking platinum miners by police at the Marikana mine.

When Aquarius, the world's 4th largest producer of the precious metal, closed production at Everest, it cited worsening industrial relations stemming from the AMCU/NUM battle which has turned workers into warriors across the platinum sector.

The country's ruling African National Congress is in a governing alliance with the NUM-affiliated national union confederation COSATU, and a perception has filtered down the shafts that the rank and file are not getting a fair deal because NUM is in bed with companies and the ANC.

This has been a common refrain among several AMCU workers Reuters has interviewed in recent weeks, from Lydenburg to the main platinum belt where police on Thursday opened fire on striking workers employed by Lonmin at its Marikana operations northwest of Johannesburg.

"The NUM, they have shares in the companies," said Fannie Bhengu, an AMCU branch chairman in Lydenburg.

Past NUM leaders who are ANC heavyweights include Cyril Ramaphosa, a business tycoon who sits on Lonmin's board. In his labour days, he led a strike 25 years ago that saw 11 mineworkers gunned down by police.

The NUM denied it had shares in mining companies, or that it had too cosy a relationship with the management of those companies.

AMCU and other upstart unions have however been drilling into a growing seam of discontent and poaching NUM members or picking up the unorganised at Lonmin, Aquarius and at the world's largest platinum mine run by Impala Platinum, which shut for 6 weeks early this year amid labour blood-letting.

The groundswell of revolt against the NUM is tapping into the same popular anger with poor government delivery of services that is confronting the ANC, marked by frequent riots in poor townships and squatter camps."

Poor and angry workers living in squatter conditions certainly have nothing to lose. That is the cause of the revolt as big companies have ignore the welfare of the society. They don't care because more riots and strikes would spell disaster for Lonmin.

Lonmin says sacking striking miners could lead to more violence

(Reuters) - Lonmin, the world's third-largest platinum producer, on Tuesday conceded that sacking 3,000 striking workers at its Marikana mine near Johannesburg, South Africa, could lead to more violence.

Profit will be severely affected this year at Lonmin....


Fewer than 7 percent of Lonmin's 28,000-strong South African workforce reported for duty on Thursday as the platinum producer held talks with warring unions, attempting to cool tensions and bring people back to work.

The world's third-largest platinum producer has been forced to shut its mining operations for almost three weeks because of a violent turf war between the established National Union of Mineworkers (NUM) and militant Association of Mineworkers and Construction Union (AMCU), which led to the deaths of 44 people this month.

That total includes 34 striking workers killed in a hail of police bullets, an event that has stiffened the resolve of surviving comrades to hold out until their demands are met.

"We have a 6.6 percent average attendance across all shafts this morning," Lonmin said in a statement.