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SUSTAINABLE DEVELOPMENT
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Creating Wealth Responsibly

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WE AIM TO CREATE VALUE THROUGH OUR DIRECT OPERATIONS – DISCOVERY, ACQUISITION, DEVELOPMENT AND MARKETING OF MINERALS AND METALS AND INDIRECT ECONOMIC IMPACTS ON SOCIETY AS A WHOLE, THE GREATER LONMIN COMMUNITY (GLC), OUR SHAREHOLDERS, BUSINESS PARTNERS, EMPLOYEES AND SUPPLIERS.

The Company has a direct and indirect economic impact on society and on the GLC in particular. We aim to maximise the positive in both these spheres. In terms of our direct economic impacts, this means investing in the sustainability of our operations, growing our portfolio of high quality assets and ensuring a high return on investment for our shareholders. In terms of our indirect economic impacts, we strive to make a positive contribution by meeting the social development needs in the GLC, and promoting sustainable economic development.

Our position on the management of economic impacts is aligned to the International Council on Mining and Metals (ICMM): Resources and Economic Position Paper that recognises the potential of the mining industry to play a part in broader economic development and poverty reduction.

Our economic and operational performance

In 2010 we have improved our economic and financial performance as South Africa and the world begin to show signs of recovery after the global economic downturn. In 2010 we report net cash distributed of US$945 million.

Our total platinum sales reported for 2010 was 706,274 oz, compared to 682,955 oz in 2009. Our platinum group metal sales was 1,325,390 oz, a year-on-year increase of 56,472 oz. A comparison with our net cash generated, net cash flows and net cash distributed for the last five years is reported under the Key Performance Indicators


Our Performance

Highlights

  • Net cash distributed of US$945 million in 2010;
  • The ratio of procurement spending with Historically Disadvantaged South Africans (HDSA) suppliers was 68.7%, this exceeded our target for 2010;
  • We spent US$2.6 million on infrastructure development in the GLC; and
  • We have made progress on our Joint Venture initiatives, which are part of our GLC Supplier Development Programme.

Challenges

  • A principal risk is the possible withdrawal of our Mining Licences resulting from failure to deliver commitments made in our Social and Labour Plans (SLP) regarding training and empowerment of our employees and communities; and
  • Administrative complications within local government structures present a challenge to the infrastructure development accessible to the public.

Value-added statement for Lonmin Plc as at 30 September 2010

2010
US$ million
2009
US$ million
% Variance
Net cash generated
Customers, consumers and investment income
Cash received for products 1,442 1,138 27
Cash return on investment 3 3 -
Suppliers12
Cash payments for materials and services purchased (473) (486) (6)
Cost of borrowings (44) (34) 29
Net cash flows 928 621 52
Cash distributed
Human capital (salaries and benefits) 659 501 32
Social capital 8.7 6.2 40
– Donations 0.2 0.5 100
– Other community projects13 8.5 5.7 49
Government taxes 36 56 (36)
Directors remuneration 6 7 (14)
Shareholders distribution - - (100)
Cash retained for sustainable growth 218 51 361
Net cash distributed 928 621 52

More information


12 We have a 30 day payment policy on services and procurement in our standard terms of purchase.
13 Inclusive of salary and administrative costs.

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