JOHANNESBURG (Reuters) – Lonmin said on Thursday it would continue to review its services and reduce costs, mainly through job cuts, as the sliding price of platinum 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 headcount.
“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.
Hurt by a 2014 strike, rising costs and a plunging platinum price, Lonmin raised $400 million through a cash call in December which failed to find favour with shareholders and priced shares at about a penny each.
Some of the proceeds of the rights issue were used to pay down debt, leaving the company with $69 million in cash at end of December.
The miner said production of refined platinum reached 171,441 ounces in the three months to the end of December, up 22.6 percent from a year earlier.
The price of platinum has been on the decline for about five years. It fell 26 percent last year and is trading at less than half its 2011 peak.
Shares in Lonmin have lost nearly all of their value over the last year. It was the worst-hit of three top platinum miners by the 2014 five-month labour stoppage.
Lonmin maintained its full-year production guidance of 700,000 platinum ounces and its capital expenditure plan of $132 million despite projecting sustained weaker metal prices.
($1 = 16.3897 rand)
(Reporting by Zandi Shabalala; editing by David Clarke and Jason Neely)