Platinum miner Lonmin has announced the resignation of COO Ben Moolman “for personal reasons”. Moolman will step down on April 5. No successor has been announced.
“My colleagues and I would like to thank Ben for his contribution to Lonmin and wish him well in his future career,” Ben Magara, CEO of Lonmin, said in the statement announcing Moolman’s departure. Moolman held the post of COO for only two years.
The announcement comes after Lonmin reported a difficult start to its new financial year due to production declining. The miner has struggled to improve productivity at its operations: Overall output from the Marikana mining operations, which account for 95% of the company’s total, was 7.8% lower in the three months to December than in the same period of the previous year.
According to a company statement, larger shafts, known as generation 2 shafts, had disappointed. The first quarter of this year also saw lower-than-expected productivity and absenteeism at its Rustenburg premises. Lonmin also said initiatives to improve production were taking longer than planned. The company said it might cut capital expenditure as the year progressed.
Metals in concentrate platinum production at 152 925 ounces in the first quarter of this year was 8.4% down, and PGM metals in concentrate output was 8.6% lower. Refined PGM output was a fifth lower, at 263 283 ounces. However, while Lonmin said it would stick to its production guidance of between 650 000 and 680 000 ounces of platinum, it effectively acknowledged it was at the mercy of the platinum group metal market. Platinum prices rose just 1% last year
The company's share price fell on the back of the announcement, with Reuters reporting analysts predicting this to remain a trend. “Lonmin’s operational and safety performance continues to be a challenge for the stock,” analysts at RBC Capital Markets said.
“Recent operational performance has been disappointing and, despite an improvement in platinum group metal prices year to date, a stronger rand has offset most if not all of this benefit. In our view, the shares remain challenged given current tight margins and near-term under-investment in the Marikana ore body, which is likely to present medium-term challenges in terms of operational flexibility.”