Platinum producer Lonmin cuts jobs and costs - CNBC Africa

Platinum producer Lonmin cuts jobs and costs

Southern Africa

by Reuters 0

The company said labour costs fell 194 million rand ($11.8 million) in the last three months of 2015 after it shed 5,077 jobs. Photo: Flickr

Platinum producer Lonmin will continue to review its services and reduce costs, mainly through cutting jobs, as the slide in the price of its main commodity bites further.

The company said labour costs fell 194 million rand ($11.8 million) in the last three months of 2015 after it shed 5,077 jobs, or 84.6 percent of its planned reduction in head count.

"Progress continues with the restructuring programme due to the new benchmarked operating model and removal of high cost production to ensure the business remains viable," Lonmin said in a statement.

It is targeting savings of 700 million rand in 2016.

Lonmin, crippled by a record 2014 strike, rising costs and a plunging platinum price, raised $400 million through a cash call in December which failed to find favour with shareholders and priced shares at about a penny each.

The miner said refined platinum production reached 171,441 ounces in the three months to the end of December, an increase of 22.6 percent from a year ago despite higher safety stoppages.

The price of platinum has been on the decline for roughly the past five years. It fell 26 percent last year and is less than half its 2011 peak.

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