Lonmin expects impairment charge of up to $2.05bn

November 2, 2015, 4:56pm

By Allan Seccombe, Business Day Live. Photo BDLive

LONMIN, the world’s third-largest platinum miner, will report an impairment of between $1.85bn and $2.05bn for the year to end-September as it cuts jobs and closes shafts to restructure the business.

Lonmin will report its full-year results on November 9 and will show an operating loss of $207m before the impairment charges.

Lonmin has told the market it wants investors to inject $400m into the company and will put in place an amended debt facility for $370m, which is conditional on the rights issue.

Lonmin recorded sales of 751,560oz for its 2015 financial year, its highest since 2007 and ahead of its 730,000oz guidance.

It produced a total of 740,315oz of platinum in concentrate for the year and generated refined platinum of 759,695oz.

Lonmin warned that the attributable net assets in the company were expected to be valued at between $1.6bn and $1.8bn after the write-down of assets during the year.

Lonmin has laid off 2,978 people out of the 6,000 jobs it has told the market it intends cutting. It has started closing older-generation shafts and has lowered its sales target for the 2016 financial year to 700,000oz, falling to 650,000oz for the following two years.

Capital expenditure for 2015 was cut to $136m from an earlier expectation of $250m and will fall to $132m this year and $110m for the following two years.

The Hossy, 1B and Newman shafts were either closed or started to shut down.