Lonmin

completed

Lonmin plc is the world’s third largest platinum producer and has its origins in Lonrho, founded in 1909 and which had extensive mining and other diverse operations across Africa. In recent years these other businesses have been disposed of and the company has focused on Platinum Group Metals (PGMs). The centre of operations is in the Marikana area, east of Rustenburg in South Africa’s North West Province. There are two interlinked operations (Western Platinum Ltd and Eastern Platinum Ltd), which include 13 major shafts, eight concentrators plus a smelter and Base Metals Refinery (BMR) in this area. Development of these mines started in 1971 and today they employ around 25,000 (including contractors). In 2005, Lonmin acquired the much smaller Messina Platinum Mines Ltd Limpopo mine which is located about 300 km north of Johannesburg in the Limpopo Province and employs around 2500 (including contractors). Lonmin also operate a Precious Metals Refinery (PMR) at Brakpan in the East Rand area employing 280. In the Marikana district approximately 350,000 people live around and on the mine lease areas which extend along a 30 km strike length. Just over 100,000 of these live on areas over which Lonmin holds a mining licence and Lonmin and its stakeholders have defined these people as the Greater Lonmin Community (GLC). In the Limpopo Province, there are a further estimated 250,000 people living in the broader mine area. Unemployment rates are high and there are many social problems not least of which is HIV/AIDS (prevalence rate estimated at 26% in the Lonmin workforce). Lonmin wishes IFC to assist it with international perspective and expertise in four technical assistance areas, namely business linkages, HIV/AIDS management, integrating women into the workforce and tribal/municipal revenue management. The IFC PEP Africa (Private Enterprise Partnership) - Technical Assistance teams, which are divided up according to the four components listed above, have completed a scoping exercise involving Lonmin, the local municipality, the principal traditional authority and other key stakeholders. It is intended that this TA package will be complemented by a loan investment on IFC’s own account and an equity investment. The loan investment will be used for expansion within the existing footprint through the part funding of projects including the mechanization of mining operations, increased mining throughput and processing expansion. The IFC commercial investment will, in part fund the upgrading or improvements to the existing infrastructure such as mechanization of underground operations and smelter upgrades both of which will have a positive impact on working conditions and safety and will thus not cause any major direct new impacts on the communities. Any new developments such as large new infrastructure would be subject to the requirement for an ESIA under both South African legislation and IFC Policy & Performance Standards.