a rock solid foundation… - the vault lonmin plc annual review 2004 1 financial highlights 2004...

For the year ending 30 September 2004

Annual Review

Lonmin Plc

A rock solid foundation…

Record performanceAchieving superioroutcomes

• Record tons milled up to14.4 million tons.

• Record primary mine production ofPlatinum up at 913,263 oz.

• Record Platinum sales up to 942,843 oz.

• Record total PGM sales up to 1.76m oz.

Quality operationsStrong foundationsfor future growth

• Prime ore reserves support 40 years of mine life.

• A New Mine Extraction Plan will provide sustainable output of 1.1 million Pt oz per annum by 2010.

• Development at 3 of the Company’sshafts has been accelerated tosupport the planned growth.

Black empowermentExceeding our commitments

• Free anti-retroviral therapy to allemployees. 242 Employees on theanti-retroviral therapy programme.

• 91.8% reduction in SO2 stackemissions from 2003.

• 2.1% of pre-tax profits were spent on community development projects.

• 35% of our total procurement wasspent on HDSA suppliers.

• Developed and implemented acomprehensive safety managementsystem based on visible leadership.

Front cover The distinctive UG2Platinum reef underpinning our long-term growth plans

� Contents1 Financial Highlights2 Chairman’s Statement4 Chief Executive’s Review8 Market Overview10 Review of Operations

12 Review of Strategic Development16 Review of Corporate Accountability18 Board of Directors20 Corporate Information

…allows you to build a strong company…

Lonmin Plc Annual Review 2004 1

Financial Highlights

2004 2003

ProfitsTurnover $1,030m $779mEBITDA1 $357m $344mEBIT 2 $303m $297mProfit before taxation $290m $291mEarnings per share 88.4c 52.5cUnderlying earnings per share3 96.9c 87.2cDividends per share 4 72.0c 72.0c

Cash flowTrading cash flow per share 229.2c 161.0cFree cash flow per share 70.7c 48.2c

Balance sheetEquity shareholders’ funds – restated5 $744m $645mNet borrowings $275m $197mGearing6 27% 23%

1 EBITDA is Group operating profit before interest, tax, depreciation and amortisation.

2 EBIT is total operating profit.3 Underlying earnings per share are calculated on attributable

profit excluding exceptional items and exchange adjustmentson tax as disclosed in note 9 to the accounts.

4 The Board recommends a final dividend of 42 US cents payableon 14 February 2005 to shareholders on the registers on 21 January 2005.

5 Equity interests have been restated to show the investment in the Employee Share Ownership Plan as a deduction fromequity shareholders’ funds.

6 Gearing is calculated on the net borrowings attributable to theGroup divided by the net borrowings attributable to the Groupplus equity shareholders’ funds.

Total operating profit

$303mPrimary mine produced platinum

913,263oz

oz

Primary mine produced platinum

0

200,000

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1,000,000 913,263907,599

757,451716,697

2004200320022001

Free cash flow per share

70.7c

cent

s

Free cash flow per share

-30

0

60

30

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70.748.2

-4.6

129.0

2004200320022001

Underlying EPS

96.9c

cent

s

Underlying EPS

0

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60

90

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96.987.2

98.5

137.4

2004200320022001

Continuing Operations

US

$milli

on

EBIT

0

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500

303297331

490

2004200320022001

Lonmin Plc Annual Review 2004

A rock solid foundation…www.lonmin.com

Chairman’s Statement

2

…based on value creation…

Dear ShareholdersThe year ended September 30, 2004 was awatershed for Lonmin. Against the backgroundof a strong operating performance, wecompleted a number of key strategic initiativesand have positioned the Company for growthand development under a new Chief Executive.

The operating results are discussed in the Chief Executive’s Review which follows my statement, and elsewhere in this report.I will therefore restrict my comments onoperational matters to thanking the whole ofthe management team and our staff on a yearof excellent achievement in an environmentwhich was challenging on many fronts.

The financial outcome was again adverselyaffected by the strength of the South Africanrand against the US dollar, which hits ourresults as our costs are overwhelmingly in randwhile our revenues are wholly in dollars. Thecurrency issue is a continuing problem for thewhole of the South African mining industry butaffects the Platinum and gold sectors morethan others. We expect this situation to reverseitself at some point but there can be nocertainty as to when this might occur.

Prices of most Platinum group metals held up well through the year. For us by far the most important metal is Platinum,where there is a structural shortfall ofproduction which should ensure strong price performance for the next few years.Palladium, our second most important

product, experienced continued priceweakness and this seems set to continue forsome time.

On the strategic front we have made majorprogress. We have accomplished thewithdrawal from non-core gold mining activitieswith the sale of our stake in Ashanti toAngloGold creating the worlds largest goldcompany AngloGold Ashanti.

We have taken advantage of the opportunity of Impala’s willingness to sell its 27 per centminority interest in our South African operatingcompanies Eastern and Western Platinum(together known as Lonmin Platinum). Thisminority interest in our business and the relatedcontractual rights constituted a major obstacleto the strategic development of Lonmin, as they contained disproportionate votingarrangements and a “poison pill” enablingGencor (and subsequently Impala) to effectivelyblock a change of control of Lonmin. Theremoval of the Impala stake in Lonmin Platinumfrees us up to pursue a wholly independentstrategic future. I would like to put on recordthat the relationship we enjoyed with Impala as a shareholder in Lonmin Platinum over manyyears was an easy and constructive one - they were good partners as well as strongcompetitors and we thank them for this.

The release of shares in Lonmin Platinum heldby Impala presented us with the opportunity todesign and implement an innovative responseto the requirement under the new South

African mining legislation to introduceHistorically Disadvantaged South Africans intothe ownership structure of Lonmin Platinum.

We embrace the spirit and intent of thelegislative framework, and despite pressreports to the contrary, I cannot imaginecircumstances in which we would wish to sue the South African Government for allegedexpropriation and we have full confidence inthe conversion rights process. We saw the new ownership requirements as an opportunityto create a new HDSA controlled miningcompany, which could start life with an alreadybroad ownership in the HDSA community.We established a new company, IncwalaResources, which initially includes more than50,000 HDSA stakeholders, to partner with usto purchase the Impala stake in LonminPlatinum. Incwala was able to raise sufficientcapital to purchase an initial 18% interest in our Platinum operations.

Incwala was launched with some fanfare inSeptember. We were delighted that TheIndustrial Development Corporation electedto make a significant equity investment inIncwala. Lonmin itself subscribed for a 23per cent stake in Incwala. Its Board has thestated ambition to create a broadlydiversified mining company whose shares, indue course, may be listed on theJohannesburg Stock Exchange. Thisinitiative was conceived as an imaginativeway to contribute to the creation of broaderand deeper capital markets in South Africa


and to the Government’s objective of widershare ownership in the previouslydisadvantaged sector of the electorate. Wewelcome our new Incwala colleagues as ourpartners in Lonmin Platinum and lookforward to working closely with them as wedevelop our respective interests in parallel infuture.

As a Board and management we are increasingour commitment to sustainable value basedand ethical business practices. We haverecently adopted a Charter and a Code ofBusiness Ethics which can be viewed on ourwebsite, www.lonmin.com.

With these strategic moves behind us we areset fair to design and develop a new futurefor Lonmin. As a Board we support themanagement’s stated objective to seek newgrowth opportunities, acknowledging thatthese are likely to broaden and diversify thebusiness in both geographic and commodityterms. This subject is dealt with at somelength in Brad Mills’ review. We endorse hiscomments. Any diversification steps we takewill be subject to robust analysis to ensurethat they will enhance the long-term future ofthe Company and are consistent with ourresources, both financial and managerial.

As we pass this watershed in the Company’shistory it is perhaps worth a pause to lookretrospectively at how the Company hasbeen transformed under the present Boardand how shareholder value has evolvedthough this process.

On September 30, 1996 the Company – then known as Lonrho Plc – had a marketcapitalisation of £781 million and consolidateddebt of £810 million. Profits before tax for theyear then ended were £78 million. The

Company including its affiliates employedsome 94,000 people. Its activities, spanningthree continents but concentrated principallyin Sub-Saharan Africa, covered a wide rangeof commerce and industry. Mining played arelatively small role in a Group which wasengaged, amongst other things, in agriculture,vehicle distribution, hotels, textiles, printingand publishing. There was little or noindustrial logic to the collection of businesses,no integrated corporate management and noapparent financial synergies.

As at September 30, 2004 the Companyhad a market capitalisation of £1.6 billionand consolidated debt of £152 million.Profits before tax for the year were£200 million and the Group headcount isdown to 21,000. In addition to anuninterrupted flow of dividends the Companyreturned $500 million to shareholders as aspecial dividend in 2003 while the value ofLonrho Africa on listing and distribution toshareholders was £133.9 million.

No call has been made on shareholders forfresh capital. Taking the market capitalisation of the Company as at September 30, 1996 as the base, the Total Shareholder Returnachieved over eight years was 174.3%, an average of over 20% a year.

The non-executive members of the Board of Lonmin regard their principle function asbeing to participate fully in the formulation of corporate and financial strategies and tosupport the Chief Executive and the otherexecutive directors in the execution of agreedstrategies. We pay due regard to the interestsof all other stakeholders including in particularour employees and the communities in whichwe operate. We also ensure that the Companycomplies with best corporate governance

practice and with the Combined Code.

Edward Haslam retired as Chief Executive inthe spring having reached normal retirementage. I would like to thank him on behalf of theshareholders and the Board for his valuedcontribution to the Group’s business in a careerwith the Company of 17 years. We wish himwell in his retirement.

Sam Jonah resigned from the Board followingthe AngloGold Ashanti merger to becomePresident of that company. Sam whosecareer started as an underground trainee inthe Obuasi mine in Ghana thirty-five years ago

had served as Chief Executive of Ashanti foreighteen years and as a member of the Boardof Lonmin for twelve years. Sam made anenormous contribution both to Ashanti and to Lonmin in his long career and we wish himevery success in his new role.

It is with great regret that I have to record theuntimely death in September of Sir AlastairMorton. Alastair had an extraordinarilydistinguished career in industrial managementand finance in both the public and the privatesectors. His incisive and clear-mindedcontribution on matters both of strategy andoperational management will be sorely missedand we extend our deepest sympathy to hiswife and family for their loss.

We look forward to another challenging yearwith confidence. The Company is wellpositioned to continue to grow.

Sir John CravenChairman24 November 2004



Chief Executive’s Review

4

…positioned for future growth…

Dear ShareholdersLonmin is a company undergoing rapidchange. With the sale of our Ashanti holdingand the completion of our buy out of Impala’sholding in our Platinum assets, we are now a focused mining company with no legacyentanglements to impede our future growth.During the year, we also completed a groundbreaking Black Economic Empowermenttransaction – the sale of 18% of Eastern andWestern Platinum to Incwala Resources (Pty)Limited. This transaction sets us firmly on thepath to the conversion of our mining rights to “new order” rights under South Africanlegislation. Conversion will guarantee us long-term access to the mineral rights that support our operations.

Turnover increased by $251 million to $1,030million in 2004 largely as a result of a 17%increase in the average price for the basket of metals sold. Unit cost increases were 22% in rand terms further exacerbated by a 16%appreciation of the average rand/$ exchangerate. This resulted in continuing operationsEBITDA of $357 million (2003: $344 million) andprofit before tax of $290 million (2003: $291million). After tax and minority interests theunderlying earnings per share were 96.9c, an11% increase on the 87.2c achieved in 2003.

There was an additional $70 million profitfrom discontinued operations arising from a$112 million profit on the sale of the sharesin AngloGold Ashanti offset by a $42 millionfunding requirement to close the SUITSpension scheme.

In cash flow terms, the net inflow fromoperations of $400 million was 35% aheadof last year, and the second highest levelever achieved by the Company, resulting in trading cash flow per share of 229.2c(2003: 161.0c). After capital expenditure of $187 million and minority dividends of $37 million, the free cash flow per share was70.7c (2003: 48.2c), broadly in line with the72c per share dividend paid to shareholders.

The net increase of $78 million in borrowingsto $275 million included the cash outflow onthe Impala/Incwala transactions of $424million, the funding requirement for the SUITSpension scheme of $41 million and the $390million realised from the AngloGold Ashantitransaction. Overall gearing ended the year at27% on equity shareholders’ funds of $744million (2003: 23% on funds of $645 million).Our Platinum operations are in excellentshape and provides the theme for this year’sreport “A Rock Solid Foundation...”.

The markets for our products remainstrong. We have fully recovered from the smelter accident of two years ago.The recent further incident at the smelteron 18 November 2004 arose from aningress of water through the roof followingthe dislodgment of a water cooling pipe.The incident is unrelated to the matte taphole explosion experienced two years agoand is minor in comparison. I currentlyestimate that we should be able to recovernormal operations by the end of January2005 and that the production target for thefinancial year to 30 September 2005 willstill be met. Our mining process engineershave developed a New Mine ExtractionPlan that will allow us to grow productionfrom our core properties to a sustainable1,100,000 ounces of primary mineproduced Platinum per year from 2010onwards – a 20% increase from this year’s record 913,263 ounces of Platinum.Our Pandora Joint Venture, which makesonly a very modest contribution, remains a source of future growth.

To further strengthen our operations and ensure they retain their status as the lowest cost primary producers ofPlatinum in the industry, we are embarkingon a major continuous improvementprogramme utilising the 6 Sigmamethodology. This will help us eliminateerrors, waste and excess costs in ourproduction processes and improve ouroverall efficiency and productivity.

We have some of the world’s best and lowestcost Platinum assets, a strong balance sheetand a highly experienced team.


At Lonmin, a critical focus is our Safety, Health,Environmental and Community performance.As a mining company we have to get theseareas of our business right. Regrettably, duringour 2004 fiscal year, we suffered 8 fatalities.While this is a reasonable result in line with thedeep level South African mining industry, it isnot an acceptable outcome for thismanagement. We are committed to theelimination of all serious accidents and injuriesand we are therefore establishing new,behavioural and risk-based safety programmesfor all of our operations.

Our biggest health exposure in our operationsis the high incidence of AIDS in our work force.Voluntary testing has revealed that about 25-30% of our work force is currently HIV positive.We have embarked on major AIDS awarenessand prevention campaigns with our employeesand with the local communities. In addition, we offer anti-retroviral treatment to allemployees who can benefit from this drugtherapy. Our goal in this area is to continue toimprove the overall quality of our employees’lives and eliminate those factors thatcontribute to this tragic epidemic such as single sex hostel living arrangements.

Our environmental and communityperformance is tightly interwoven. We have to continue to make substantial investmentstoward lessening or eliminating our impact onthe environment and improving our relationswith the local communities. Our long-term goalis self sustaining, healthy communities thatsupport our operations and employees. Wehave firm programs in place to ensure that weare making steady progress in both of theseimportant areas. Case studies of ourcommunity development effort are publishedon our web site (www.lonmin.com) and in ourannual Sustainable Development Report.

Looking forward, one of the critical issues that has been facing the Company is how best to grow value given the relatively limitedopportunities in the Platinum industry?

The characteristics that make our businessstrong are a highly consolidated industrystructure with long-term contracts betweenour customers and ourselves. Our customersvalue continuity of supply, this is critical for theirbusinesses. They need to know that we willmeet our commitments to them. Our low costoperations ensure that we can operateuninterrupted through any price cycle. Today,Lonmin has some of the best Platinum assetsin the world and we are looking to add to thissimilar quality mineral deposits that have thesame kind of customer-supplier relationships

in commodities with similar industry dynamics.Our core mining skills are readily transferableand our track record of meeting long-termcustomer expectation is a strategic asset. Weare committed to the growth of shareholdervalue and we will be patient in our efforts toidentify opportunities that ensure that we canachieve the core objective of growing cashflow and earnings per share.

I would like to offer my personal thanks to all of the Lonmin and Lonmin Platinum’semployees that have worked hard throughoutthe year to help the Company achieve thisyears’ outstanding results. While manychallenges remain, I am confident that wehave the talent and will to meet them.

The strategic growth of the Lonmin Group is key to its future success.As Chief Executive, I believe that:

Our high quality, long life platinum assets, excellent management team,strong customer relations and Black Economic Empowerment partners,represent a rock solid foundation from which to grow our business.

Our strategy is to seek new value creating growth by maximising the value ofour core assets and identifying resources we can develop in similar markets.

Our growth platform builds on our core skills of mine development, mineral processing, customer relationship management and strong financial disciplines.

The operations today are striving for excellence in every area with anemphasis on better safety performance, higher productivity, betterenvironmental performance and stronger community relationships.

Corporate sustainable development is a key element of our long-termstrategy. By focussing on building healthy communities that support ouroperations, we ensure our own long-term future.



Chief Executive’s Review

6

Questions & answers

1. Your strategy is to grow the Companyby diversifying its earnings base. Why notstay as a pure Platinum company?Single commodity companies have significantearnings and cash flow volatility. Thistranslates into significant share price volatilityand lower earnings and cash flow multiplesthan for companies with more stable earnings.Our strategy is to leverage our core miningand marketing skills into new commodities todiversify our single commodity and singlecurrency risk.

2. Can you explain the Incwalatransaction and the need for BlackEconomic Empowerment?After the end of the Apartheid era, the SouthAfrican government recognised the need to

address social and financial imbalancescreated under the old system of racialsuppression. In the mining sector they havecreated what is known as the “Mining Charter”.This legislation requires companies toconvert their existing mining rights to neworder mining rights over a five year period bymeeting specific requirements for the sale ofequity, employment, HSEC and purchasingto Historically Disadvantaged South Africans.The Incwala transaction results in 18% of ourSouth African Platinum assets being owned by an HDSA controlled company. We believethis sale of ownership meets one of thefundamental requirements of this legislation andsets us firmly on the road to conversion of ourmineral rights to a new order mining licence.

3. The unit costs you are reporting haveincreased this year well above inflation.Do you have any program to slow downthese increases?A number of factors have come togetherresulting in higher costs in 2004. We haveseen substantial cost pressures in a number of key cost centres within South Africa.As a result of this and the general need toimprove our productivity and efficiency, we have introduced a formal continuousimprovement programme based on the 6 Sigma methodology. Our goal going forward is to offset, as far as possible, anyinflationary cost increases in South Africa for the next few years.

4. What are the prospects for the PGMmarkets in the coming year?Today 75-80% of the world’s PGM productionis used in industrial applications and ascomponents in consumer products. The mostimportant use is in the catalytic converter of automobiles, trucks and other internalcombustion engines. Two factors are drivingincreased demand for PGMs in theseapplications. The first, is the continuedtightening of performance requirement in theUS and Europe, this translates into greaterPGM use. The second factor is the rapidadoption of air quality emission legislation forvehicles by emerging market countries, themost important of which is China. We expectthese factors to result in the continuation ofgrowth in demand for PGMs for the next few

Brad Mills joined Lonmin in March2004, he answers some of thequestions frequently asked since he has been at the helm.


years at least. On the supply side, growth inproduction has been slowed by the strongrand and the general difficulty of promotingnew mine development in South Africa while atthe same time achieving conversion of mineralrights to “new order rights”.

5. You have increased your Platinumgrowth target from your core operationsto 1,100,000 ounces per annum from 2010without including Pandora. What isdifferent from last year?We have made major progress on our three new shaft developments over the last twelve months. At the same time we have re-examined the economics of thePandora JV. This has resulted in increasing our confidence of delivering more from ourcurrent infrastructure at better capital returns and lower costs than a major Greenfielddevelopment at Pandora. Additionally, we can achieve the higher production rate withless total capital than would have beenrequired for the original Pandoradevelopment. All of this makes goodeconomic sense and we may be able torecommence the Pandora developmentwhen the market conditions are morefavourable for its implementation.

6. Can you tell me more about yourSafety, Health, Environmental andCommunity programme and targets?Our Safety, Health, Environment andCommunity programs are all designed todeliver our core corporate values of a safe

working environment for our employees, nopermanent environmental damage and self-reliant sustainable local communities. We areadopting a risked-based approach andbehavioural focus for our safety andenvironmental programs. This is fundamentallydifferent from what was delivered in the past,which was primarily a compliance basedsystem. Our community development andhealth programs are designed to build localcapacity for business development,community health and safety management.

7. What do you perceive as the majorrisks to the Company. Are you comfortablewith them and how can they be mitigated?The Company’s core risks fall into twocategories; those that are primarily strategicand those that are primarily operational.

Our strategic risks revolve around being asingle commodity business with a singlecurrency cost base. We have a well-definedstrategy to utilise our core strengths todiversify this risk.

Our operational risk is derived from thetechnically demanding nature of our business.We perform annual detailed bottom up riskassessments to identify operational risks anddevelop plans to manage and mitigate theserisks. All of this is subject to detailedperformance audits to ensure we areidentifying and managing risk appropriately.

8. What impact has the strong rand had on result?The rand appreciated some 18% over thecourse of the year and this had a significantimpact on the entire South African miningindustry. This is evident in Lonmin through ourunit costs which increased by 45%, in USdollar terms versus only 22% in rand terms.Fortunately in our sector some 75% of theworld’s Platinum comes from South Africaresulting in some correlation between metalsprice and exchange rate. Firm prices havetherefore to a degree cushioned the impact of the rands’ strength and dollar weakness.

Brad MillsChief Executive24 November 2004

�



Market Overview

8

Markets

Platinum wedding bands.� Catalyst substrates for a range of light duty vehicle and motor cycleapplications.

�

Lonmin is the third largestprimary producer ofPlatinum in the world,producing over 900,000ounces and roughly asimilar number of ounces of the other PlatinumGroup Metals such asPalladium and Rhodium.

We have 15 customers in total. These relationships are long-term,stable and mutually beneficial. Theygive us insight into supply demanddynamics enabling us to use theirknowledge in our strategic planningfor the business.

Our global marketing program sells PGMsinto all of the major markets in Europe, the US and Asia. Platinum Group Metalshave unique properties and are used acrossthe range of the many differing applications.

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03 04

The Platinum Market

Applications

Commentary

The Platinum market set new records during the year as prices reached 24-year highs on the principal commodity exchanges. Upwardmomentum came from the general strength of the commodity markets as the US dollarweakened, the South African rand strengthenedand as China’s economy continued tostrengthen. Measures to curb unbridledeconomic growth in China were introduced bythe Government taking some of the speculativeelement from the Platinum price but thefundamentals continue to be underpinned bystrong growth in the automobile catalyst sector,particularly diesel passenger vehicles.

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The Palladium Market

Applications

Commentary

Palladium has been fundamentally weakduring the period under review as aninventory overhang effectively caps marketprices. Demand in the principal applicationshas recovered year-on-year and should befurther abetted by the significant Platinum topalladium price differential. This may motivatesome of the automobile companies topartially migrate from Platinum catalysis wheretechnically and economically feasible andcould provide a stable floor to the market.

• Platinum’s usage in automobile catalystsaccounts for 45% of the metal’s gross demand.It is used with Palladium and Rhodium ingasoline vehicle catalysts and is exclusivelyused in diesel passenger vehicle catalysts.

• The jewellery market continues to bedominated by China and Japan althoughdemand has softened in a direct response tohigh price levels. There is a core global bridalsegment augmented by a more price sensitivefashion component.

• Electro-chemical applications, including harddisc applications are steady while increasedproduction of LCD screens will benefitplatinum crucible sales.

• Palladium’s dominant application is inautomobile catalysis where its particularattribute is its ability to operate at hightemperatures to eliminate harmfulhydrocarbons from vehicle exhaust streams.This accounts for over 60% of the metal’sgross demand.

• The electronics industry uses palladiumin many components, but principally inresistors used in mobile phone applications.Miniaturisation, however, has recently resultedin a lower palladium content per piece.

• Palladium is used extensively in dental alloyswith the two strongest markets being Japanand the US.

�


Key Facts

Temperature sensor made of Platinum.�

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03 04

The Rhodium Market

Applications

• 90% of gross Rhodium demand comesfrom the automobile catalyst industry.Varying compositions of Rhodium,Platinum and Palladium are used to reducepollutant emissions such as hydrocarbons,carbon monoxide and nitrogen oxides fromgasoline engine exhaust streams. Theseso-called three way catalysts optimise theuse of the constituent metals to enablevehicle manufacturers to meet evertightening global emissions legislation.

• Niche applications in both the chemicaland glass industries account for thebalance of Rhodium demand.

Commentary

The Rhodium market tends to becomparatively illiquid, resulting in short termprice volatility not necessarily directly relatedto the market fundamentals. There has been,however, a more solid feel to the marketduring the latter part of the year under review and should consolidate at higherprices than the 2004 Financial Year average,as increasingly more onerous emissionslegislation will necessitate further Rhodiumpurchases by the automobile companies.

5 year world demand for PGMs

Refined world metal sales of Platinum

2004 world refined PGM metal sales 2004 Pt world demand/applications

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Review of Operations

10

Operations

Our mining and process engineers havedeveloped a New Mine Extraction Plan that will allow us to grow production from our core properties to a sustainable1,100,000 ounces of primary mineproduced Platinum per year from 2010 onwards.

Sunset at K4 mine, Karee.�

Improving PGM recoveries

Work being carried out to improvePGM recoveries on Lonmin Platinum’sConcentrators.Two projects are currently underway to improvethe PGM recoveries on Lonmin Platinum’sEastern Platinum and Rowland Concentrators.Both of these projects will be commissionedearly in 2005.

At Eastern Platinum an ultra-fine grinding mill isbeing installed to recover some of the PGMs lostin the cleaner tailings. This installation follows anextensive pilot plant study and the success of asimilar installation at the EPC concentrator. Mostof the PGMs in the cleaner tailings are ultra-fineand are not liberated. The use of ultra-fine

grinding will ensure better liberation of theselocked PGMs and higher recoveries.

At the Rowland concentrator the circuitconfiguration is being changed from one whereall of the milling is done upfront to a mill-floatcircuit. This project involves the re-arrangementof the current mills and the installation of someadditional flotation capacity. A similar circuitre-arrangement was carried out at 1 ShaftConcentrator during 2002 with a good recoveryimprovement. This circuit change improvesrecovery by allowing PGM containing particlesto be floated as soon as they are liberatedrather than being over-ground which is oftenthe case if all the milling is carried out upfront.

�


For us, 2004 has been characterised by somenew records, some successes and, inevitably,a few failures. We have, however, learnedconsiderably this year and, as outlined below,have laid the bedrock for the future in severalareas that will ensure that we continue todeliver strong growth for our shareholders in the coming years.

ProductionMining output in 2004 was again a record at14.4 million tons milled.

During the first four months of the 2004financial year, some flotation concentratecontinued to be sent for toll smelting andrefining as the No. 1 Furnace was still underrepair. The latter came on line in January 2004and, following a period of commissioning,production was steadily ramped up with closeto design outputs being achieved in July.

Primary mine production of Platinum was arecord at 913,263 oz, with total output being918,454 oz including the metal resulting fromthe last of the old residue ponds. Thiscompares to last year’s primary output of907,599 oz (total output including pondresidues 932,867 oz). Platinum ounces soldwere also a record at 942,843 oz.

Production GrowthThe Pandora JV Project has been an integralpart of Lonmin Platinum’s long-term productionplan since 2000. Various delays to the projectduring the last few years, and the co-incidental

strengthening of the South African rand,necessitated a review of the viability of theproject. The review resulted in a drasticallyreduced production and capital expenditureplan being tabled, which in essence is a“holding” plan for the project; its scope willbe reviewed annually, and when deemedappropriate, an increased scale will bemotivated.

A New Mine Extraction Plan has, therefore,been developed as follows:• The development and opening up of ore

reserves at 3 of our current major projectswill be accelerated: Saffy Shaft, Hossy Shaftcomplex and the K4 Twin Shaft complex.

• It is also proposed that a sub-decline onthe Merensky horizon be developed atRowland Shaft, Western Platinum, whichwill, provide a 20,000 tpm expansion.

Full production on Saffy and K4 shafts will now be reached 5 and 6 years earlier in2009 and 2011 respectively, whilst on Hossyfull production will be reached 1 year earlierin 2008. These actions will fill the production void created by the curtailment of LonminPlatinum’s portion of the Pandora project.

The effect of these changes can be seen onthe graph overleaf. The graph shows thatproduction of 1 million Pt oz per annum isstill achievable circa 2007 and that it is nowpossible to reach an increased sustainableproduction rate of 1.1 million oz Pt perannum by 2010.

The graph also depicts the change in capitalexpenditure required to implement the NewMine Extraction Plan; the capital expenditureprofile has also been affected by thestrengthening of the rand.

Unit CostsCash costs per PGM ounce sold in SouthAfrican rand increased some 22.4% over2003, to R2,411; in dollar terms the increasewas 45.2%, mainly due to the sustainedstrength of the rand in 2004.

Costs were affected by the toll smelting andrefining by a third party, and the continuedrunning of the old Merensky and Pyromentfurnaces in the first half, increased opencastthroughput and investment in safety, health,environment and CSI programmes.

Clearly, however, this upward cost trend isunacceptable and a number of interventionshave already been put in place to reversethis unhealthy trend. These include theintroduction of a 6 Sigma Programme forcost reduction and efficiency improvement,an increased training drive, and a focus onthe management of waste in all its forms.6 Sigma is a data driven business philosophyof focussing on continuous improvement.It is aimed at the near-elimination of defectsfrom every process, transaction and productby eliminating the various elements of wasteand reducing variation. In addition, it focusesat understanding both internal, as well asexternal, customer needs, analysing

Aerial view of K4 twin shaft project.�

�



Review of Operations

12

business processes, and instituting propermeasurement methods. Clearly the return tohealth of the No. 1 Furnace, and non-reliance on toll treatment going forward, willalso contribute to cost reduction.

Mechanisation and AutomationThe Mechanisation and Automation (M&A)strategy is aligned to Lonmin Platinum’sstrategic direction; its vision and values. Thisstrategy is currently re-engineering themining operations in the future, ensuringoperational excellence through a culture ofinnovation, creative change and acommitment to continuous improvement.The M&A strategy focuses on three mainareas:• Worker;• Workplace;• Supervisor.

The re-engineering strategy is seeking andimplementing alternative mining methodsthat reduce our workers’ exposure to:• Hazardous practice;• Hard physical work.

Furthermore, the strategy is aligned to theoperational improvements sought throughLonmin Platinum’s strategic thrusts, thesebeing a:• 20% improvement in cost and

productivity indicators;

• 25% conversion of conventional miningmethods to those of a mechanised and/orautomated nature;

• Developing new and alternate skills.

Narrow Reef MinerThe second generation ARM machine wasintroduced early in 2004. This machineincorporates many additional features andimprovements learned from the initial proto-type machine. The production machine isprogressing well, cutting 3 linear meters perday (single shift). Work is now focussed onperfecting the cutters and developing thebusiness case before entering the double shift phase early in the new year.

Ultra Low ProfileThe third phase of the project, namely the integration of machine and people into the mining system, has successfully beencompleted. The business case for theexpansion of this project into an initial 30,000 tpm Merensky mining operation is in an advanced stage.

Tunnel Digging MachineThis project incorporates a unique multi-functional machine with haulage conveyorsinto a high-speed development process.The initial phase of this project, design andinstallation of infrastructure is complete. Themining trial phase commences in late 2004.

Boxhole BorerThis unique concept to rapidly develop boxholes/travelling ways with a compact andmobile machine is progressing well. Thecommissioning of the prototype machine is scheduled for October 2004.

PeopleWork continues on the development of skillsmatrices to support mechanised mining.With many of the projects advancing from the trial phase into that of fully fledged miningoperations, we now have many peopleworking in a safer, healthier environment whoare highly skilled and hence better rewarded.

Non-explosive MiningWork continues for the search for a viablealternative non-explosive mining method tocomplement the Narrow Reef Miner.

Mineral ResourcesThe total proven and probable reserves of PGMs at 30 September 2004 were74.1million troy oz compared to 75.8 milliontroy oz at 30 September 2003.For full details of the Group’s mineral reservesand resources visit www.lonmin.com/.

The ULP (Ultra Low Profile) Face Rigis part of the ULP fleet of equipment.This machine performs the primary miningfunction of drilling the face.

�

Mining ResourcesPGMs and gold troy oz millions

2004 2003

Mineral Reserves

Proven 2.6 2.76

Probable 71.5 73.02

Total 74.1 75.78

Mineral Resources

Total 44.8 35.28

Original and revised production and capex profiles

New Mine Extraction Plan

US

$ m

illion

50

Pt O

unce

s

400

500

600

700

800

900

1000

1100

1200

100

150

200Original Capex

Revised Capex

Production

Costs

New Mine ExtractionPlan (Pt oz )

Original Plan (Pt oz)

Production excludingexternal resources

Actual Capex

2003 2004 2005 2006 2007 2008 2009 201020022000 20010

� Opencast Project

The Opencast project has been a hugesuccess with two world-class concentratorscommissioned within 14 months of the projectbeing approved in July 2001. The project calledfor a total production of 7 million tons milledand 17.2 tons of PGMs in matte produced for a four-year period ending 2005. Production forthe period ending 30 September 2004 is at 6

million tons milled with 17.4 tons of PGMs in matte produced. Projected production forthe full period ending 2005 is 8.8 million tonsmilled and 25.9 of PGMs milled in matte. Theworking cost was budgeted at $12,241 per kgproduced and is currently running at $8,546per kg produced.


Platinum Operating Statistics – 5 year review September September September September September2004 2003 2002 2001 2000

Tons milled (excluding slag) underground (000) 11,121 11,418 11,260 10,520 9,734opencast (000) 3,283 2,790 – – –Total (000) 14,404 14,208 11,260 10,520 9,734

Tons mined underground (000) 11,070 11,450 12,346 10,111 9,858opencast (000) 2,730 2,880 – – –Total (000) 13,800 14,330 12,346 10,111 9,858

UG2 to Merensky Ratio (%) 82.4 81.6 78.3 77.1 76.0Noble metals in matte (kg) 55,031 54,295 46,557 44,163 40,810Yield into matte (g/t) 3.82 3.83 4.13 4.20 4.19Primary Mine Platinum Production (oz) 913,263 907,599 757,451 716,697 659,770Refined production of platinum (oz) 918,454 932,867 757,451 716,697 659,770

palladium (oz) 397,894 417,418 350,792 323,725 293,274rhodium (oz) 113,327 140,514 113,549 101,881 88,797Total PGMs (oz) 1,679,871 1,757,757 1,467,525 1,357,301 1,235,501

Capital expenditure (R millions) 1,230.1 1,293.6 1,558.2 936.5 768.2($ millions) 186.8 161.5 150.3 113.5 110.0

Sales platinum (oz) 942,843 903,077 757,958 707,379 658,664palladium (oz) 406,177 405,073 349,243 315,697 297,741rhodium (oz) 126,956 131,752 109,194 95,138 91,918Total PGMs (oz) 1,764,474 1,728,387 1,415,112 1,307,495 1,244,853

Average price received per ounce platinum (R) 5,356 5,053 5,357 4,411 3,400($) 816 645 501 544 504

palladium (R) 1,485 1,698 3,759 5,404 3,645($) 227 212 351 670 540

rhodium (R) 4,876 4,201 9,123 13,813 11,475($) 745 529 850 1,703 1,684

Basket price of PGMs and base metals ($/kg) 17,072 14,618 13,662 18,652 N/CCash cost per refined ounce of PGM sold (inc royalties) (R) 2,422 1,974 1,863 1,660 1,432

($) 365 251 176 205 212Cash cost per refined ounce of PGM sold (ex royalties) (R) 2,411 1,969 1,847 1,655 1,412

($) 363 250 174 205 209Cash cost per refined ounce of PGM produced (ex royalties) underground (R) 2,399 2,022 1,776 N/C N/C

($) 369 257 168 N/C N/Copencast (R) 2,787 1,801 2,726 N/C N/C

($) 422 229 257 N/C N/CTotal (R) 2,469 1,996 1,780 1,594 1,416

($) 379 254 168 197 214Average exchange rates Sterling (£/$) 0.56 0.62 0.68 0.69 0.64

S A rand (R/$) 6.60 7.90 10.70 8.00 6.60Closing exchange rates Sterling (£/$) 0.55 0.60 0.64 0.69 0.69

S A rand (R/$) 6.48 6.97 10.54 8.77 7.23

Employees in the BMR Smelter.�



Review of Corporate Development

14

Strategic development

Shaft sinking at Saffy Mine.�

Incwala Resources

On 18 September 2003, Lonmin jointlyannounced with Implats the sale of Implats’27.1% interest in Lonmin Platinum and thecreation of a new Black Empowermentcompany subsequently named “IncwalaResources”. This transaction was bothinnovative and pioneering in that:• It created an empowerment company with a

broad base of shareholders including some20,000 employees of Lonmin Platinum and10,000 local community members;

• Incwala is both majority owned andcontrolled by Historically DisadvantagedSouth Africans. These empowermentcredentials have been welcomed by theSouth African Government;

• Lonmin attracted the South African IndustrialDevelopment Corporation as a direct equity investor;

• Lonmin established the first publicly endorsedtransfer of empowerment credits by a seller of an asset to its remaining group assets;

• Lonmin remains a 23.6% equity participant in Incwala, well positioned to share in thegrowth potential of this sound financialempowerment platform;

• The transaction provides empowerment creditsfor the Lonmin Platinum mining licence renewal.

This is a watershed transaction for Lonmin andhas enabled us to consider a new strategic vista.

�


Our high quality, long life platinum assets andour Black Economic Empowerment associateIncwala Resources represent a solidfoundation from which to grow our business.We will build on our core skills of costefficient mine development, mineralprocessing, customer relationshipmanagement and strong financial disciplines.

Our strategy is to seek new value creatinggrowth by maximising the value of our coreassets and identifying resources we candevelop in similar markets.

This strategy will be pursued in three areas:

Growth through acquisition incommodities with similar marketsWe believe that our core skills are transferableinto other commodities, with the best fit beingwhat we refer to as the “non screen tradedcommodities”. The markets of suchcommodities tend to function in a similar mannerto PGMs with few market participants andconsistently attractive returns. We are in theprocess of evaluating a number of such options,any one of which would present an interestingand value creating combination with PGMs.

Currently our asset portfolio is South Africancentric. We are very comfortable operating inAfrica and would consider further investment

given a value accretive opportunity. Indeedour close relationship with our associateIncwala Resources means we are well placedto do just that. Diversification by commodityhowever, will also permit us to more easilydiversify our geographic profile, distributing risk and making us a global player.

Ultimately, we believe that growth byacquisition through both commodity andgeographic diversification is a prerequisite if we are to achieve the size and rating criteriatargets that we have set ourselves.

Growth within the PGM arenaMaximising the value of Lonmin Platinumthrough organic growth is covered elsewherein this document. In addition to this, the newbusiness team is seeking to complement ourPGM portfolio through the addition of newsources of PGMs, both within South Africaand elsewhere in the world.

ExplorationAll growth is founded on mineral discovery.Building on previous years’ early stageprojects, we have made substantial progressin several areas. In addition to our six existingprojects, we are expanding our search forfurther opportunities, with preference for thoseat a more advanced stage of exploration.

Canada — The Sudbury Camp JointVenture (SCJV)A new PGM discovery was made during theyear on the Wisner property with 3 shallow drill holes intersecting multi-gram values.The successful identification techniques usedat Wisner are now being applied acrossother properties in the SCJV portfolio.

South Africa – Loskop This project comprises joint ventures near the Loskop Dam in the Eastern Bushveld.It has a combined strike length of over 30kmand hosts several PGM mineralised targets.Drilling results have achieved mixed results,but are encouraging in several areas.

Tanzania – MibangoDrilling on the large nickel-PGM bearinglaterite deposit continues with the objectiveof quantifying the potential resources andobtaining samples for metallurgical test work.

Tanzania – LuwumbuWe have completed the first year of explorationon the Luwumbu project where anomalousPGM and nickel values in soils were identifiedover a strike of several kilometres.

USA (Alaska) – Union BayAn airborne geophysical survey revealedseveral large new anomalies that are plannedfor drilling in the coming year.

Underground drilling at Rowland Shaft.�

Sustainabledevelopment



Review of Corporate Accountability

16

While HIV/AIDS is clearly a health crisis, we have come to realise that it is also adevelopment risk that exposes humanwelfare, social cohesion, socio-economicgrowth and productivity.

We are committed to the effectivemanagement of the disease and its associatedimpacts on employees, the workplace and the communities where we operate. Our focushas evolved and expanded over the past fewyears from policy and strategy development,awareness and education programmes, towellness management programmes dealingwith preventative and palliative care. We havetaken the bold step to provide our employeeswith anti-retroviral therapy (ART), turning thetide for HIV-positive employees from despair to hope.

We have made significant progress with theadministration of anti-retroviral therapy to ouremployees. The programme commenced inJanuary 2004 and just nine months later, thereare 242 patients on the treatment programmeand 94% of them are back at work.

The EnvironmentOur commitment is to balance economicdevelopment with environmental excellence,causing no permanent environmental harmwhere we operate. We have set a strategicmilestone of 100% legal compliance by 30 September 2005. A third-party legal

The safety of our employees and thecommunities in which we operate is a corevalue of our business. Our goal is ZeroHarm. To achieve this we seek to create amindset where people believe it is possibleto work injury free.

It is with regret that we report the tragic loss ofeight lives due to work-related activities. Theeight fatalities constitute 6 full-time employeesand 2 contractors. We remain determined tomake zero fatalities a reality at our operations.

Our performance, as measured by the losttime injury frequency rate for employees andcontractors, improved by 2% compared to

2003. This figure represents a total of 1,294Lost Time Injuries (LTI), compared to 1,327 in2003, with a severity ratio of 14.7 days lostper LTI. This is the first step towardsachieving our target of a 50% reduction in losttime injury frequency by 2005.

To achieve our safety goal, our focus is onvisible leadership, individual accountability,setting appropriate targets, engaging in theworkplace, implementing minimum SHECManagement Standards and auditingperformance against those standards. Wehave also implemented Fatal Risk Protocolsto give guidance to our operations regardingthe management of our major hazards that cause fatalities.

We seek to create a mindset where peoplebelieve it is possible to work injury free.�

Corporate sustainable development is a key element of our long-termstrategy. By focussing on buildinghealthy communities that support our operations, we ensure our long-term future.

�


compliance assessment was conducted at allour operations in November 2003 andidentified 189 instances of legal non-conformance. To date, 163 of these instanceshave been corrected at an approximate costof $0.8m. The outstanding legal complianceelements primarily comprised regulatory filingsor other minor matters where there wascommonly no process for registration in placeand where we are waiting for feedback fromthe regulatory bodies. Atmospheric emissionspose a significant risk to our employees, thecommunities adjacent to our operations andthe environment. The major risk factors aresulphur dioxide emissions from our smeltingoperations and dust proliferation from theslimes dam complexes. The average sulphurfixation plant utilisation for 2004 was 95.6%,the utilisation improving markedly over the lastsix months with an average of 99.5% for thatperiod. The SO2 release into the atmospherevia the sulphur fixation plant stack was onaverage 3.4 t/day during 2004 (41.4 t/day –2003), a 91.8% improvement.

Our water use for primary activities decreasedby 8.2% from 11,595 Ml to 10,714 Ml.Comprehensive integrated water and wastemanagement plans were compiled for each of the operations to optimise water and saltbalances, improve process efficiency,effectively control risk areas and provide a

framework for legislative requirements andcontinual improvement through target-settingand implementation of best practices.

Land management plans have been compiledfor all our sites and will provide a frameworkfor the control of legal requirements andenvironmental risks. We have developed mineclosure plans to facilitate rolling rehabilitationthat not only benefits the environment, butalso reduces the cost of mine closure. Thisprocess incorporated a comprehensivequantum assessment of the financial provisionrequired for closure.

CommunityWe are committed to making a sustainabledifference to our local communities bycontributing to the long-term social andeconomic development of our employees,their families and the local communitiesassociated or affected by our operations to ensure their long-term sustainability.

We align our Corporate Social Investment(CSI) programmes with local, regional andnational priorities and strategies. Wecommunicate and engage in regular dialogue with both our internal and externalstakeholders regarding our activities. We alsodevelop and participate in partnerships thatcreate an environment of mutual co-operation.

The Lonmin Development Trust serves as a primary vehicle for our communitydevelopment and charitable programmes.The Trust was established this year and has contributed a total of US$6.46 million to programmes that will add value to andenhance people’s lives. This equates to 2.1% of our pre-tax profits from continuingoperations, achieving our target for this year.

Some of the projects that we invested inincluded:• Conversion of hostel blocks into family units;• Construction of additional high density

houses in Marikana, mainly for employees;• Co-funding with local government of 650

low cost houses for the community;• Construction of a primary school;• Various rural development projects such as

water boreholes, sanitation, electrification,agriculture, and home based care for theterminally ill; and

• Agricultural projects which will create some1,500 jobs in the local community over thenext 3 years.

It is planned to spend a further $6 million onCSI in 2005.

Instilling a learning culture in our future leaders.� Creating business opportunities in

our local communities ensures sustainable,social and economic development.

�

�

1

5 6



Board of Directors

18

Executive Directors

1 Brad Mills (50) Chief ExecutiveAppointed as a director and chief executive inMarch 2004. Holds a first degree in geologyand a masters degree in minerals economicsfrom Stanford University. After working inexploration and business development forMagma Copper, he held a variety of senior rolesfor BHP following that company’s acquisition ofMagma. One of the architects of the merger ofBHP and Billiton in 2001, he subsequentlyheaded up strategy for the combined groupbefore becoming head of BHP Billiton’s basemetals division, a business considerably largerthan Lonmin. Brad is a US national.

2 Ian Farmer (42) Chief Strategic OfficerAppointed a director in 2001 and hasresponsibilities for the Company’s businessdevelopment, exploration and marketingactivities. A chartered accountant, he joinedthe Company in 1986 and transferred to agroup company in Zambia in 1990. In 1995 he was appointed finance director of LonminPlatinum in South Africa, which position herelinquished upon his transfer to London in2001. He is a director of the InternationalPlatinum Association and of Furuya Metals Co.Limited, Tokyo, and currently acts as theinterim chief executive of Incwala Resources(Pty) Limited, which holds a minority interest in Lonmin’s South African operatingsubsidiaries. Ian has both South African and British nationality.

3 Peter Ledger (55)President – PlatinumAppointed a director in November 2002.A mining engineering graduate of WitsUniversity, he also holds a mine manager’scertificate of competency and gained broadoperational experience of coal, chrome,asbestos and gold mining, prior to joining the Lonmin Group in 1988 as a consultingengineer. Peter assumed operationalresponsibility for our platinum mines in 1990and was subsequently appointed as theoperations director of Lonmin Platinum in1997 and as managing director in 2000.Peter has South African nationality.

4 John Robinson (50) Chief Financial OfficerAfter reading economics at CambridgeUniversity, John qualified as a charteredaccountant whilst working for ThomsonMcLintock & Co, now a part of KPMG. Hejoined the Company in 1979 as a financialanalyst and held a subsequent post as afinance executive working with the miningoperations. Appointed as an associatedirector in 1992, he subsequently joined the Board as finance director in 1999. Heplayed a pivotal role in the sale or closure of numerous companies, particularly from1997 onwards, helping to shape Lonmin intoa focused mining company. John is British.

432

7 8


Non-executive Directors

5 Sir John Craven (64) ChairmanAppointed as an independent non-executivedirector and chairman of the Board in 1997.Currently chairman of Fleming Family andPartners Limited, an independent, privately-owned investment house, he was previouslythe group chief executive and chairman ofMorgan Grenfell Group plc and subsequentlya member of the board of managing directorsof Deutsche Bank AG after that company’sacquisition of Morgan Grenfell. He has helda number of non-executive directorships,including Reuters Holdings plc, and is anon-executive director of Incwala Resources(Pty) Limited and a director of Patagonia Gold.Sir John holds both British and Canadiannationality and was knighted for his servicesto banking and to the City.

6 Roger Phillimore (55) Deputy Chairman and Senior Independent DirectorAppointed an independent non-executivedirector in 1997. Chairman of the nominationand remuneration committees, and amember of audit committee. Formerly jointmanaging director of Minorco, he is currentlya non-executive director of Aber DiamondCorporation. Roger holds both British andSouth African nationality.

7 Peter Godsoe (66)A chartered accountant and banker with anMBA from Harvard, he was appointed anindependent non-executive director in 2001.He is a member of the nomination andremuneration committees of the Board, andwas appointed to the audit committee inSeptember 2004. Formerly chairman and chiefexecutive officer of The Bank of Nova Scotia, heis also a non-executive director of Barrick Gold,Fairmont Hotels & Resorts Inc. and Ingersoll-Rand Company. Peter is a Canadian national.

8 Michael Hartnall (62)Appointed an independent non-executivedirector in May 2003. He is the chairman of the audit committee, a member of theremuneration committee and also sits on the risk & SHEC committee. A charteredaccountant and former finance director of Rexam Plc, he is also a non-executivedirector of BAE SYSTEMS plc and ElementisPlc. Michael is British.

Sir Alastair Morton 1938 – 2004Sir Alastair Morton, one of the Company’snon-executive directors, passed away on 1 September 2004. Sir Alastair joined theBoard in March 1998 and chaired the audit committee until the end of 2003.

The Company will miss his wise counsel and thoughtful contributions to its business.



Corporate Information

20

Company secretary and registered officeRob Bellhouse BSc FCISLonmin Plc4 Grosvenor PlaceLondonSW1X 7YLUnited Kingdom

Lonmin is registered in England and Wales as company number 103002

Telephone +44 (0) 020 7201 6000Fax +44 (0) 020 7201 6100E-mail [email protected] www.lonmin.com

External auditorsKPMG Audit PlcPO Box 6958 Salisbury SquareLondonEC4Y 8BBUnited Kingdom

Internal auditorsErnst & YoungBusiness Risk Services (SA)PO Box 2322Johannesburg 2000South Africa

Principal group bankersLloyds TSB Bank PlcStandard Chartered BankStandard BankHSBC Bank Plc

StockbrokersCazenove & Co. LtdHSBC Investment Bank plc

RegistrarsLloyds TSB Registrars The CausewayWorthing West SussexBN99 6DAUnited Kingdom

Telephone UK Callers 0870 600 3970 UK Fax 0870 600 3980International Callers +44 (0) 121 415 7047 Fax +44 (0) 1903 833371

Computershare Investor Services 2004(Pty) LimitedPO Box 61051Marshalltown 2107South Africa

Telephone +27 11 370 5000Fax +27 11 688 5217 or 7707

Street Address70 Marshall StreetJohannesburg 2001South Africa

The Bank of New YorkADR Shareholder Enquiries Dept.PO Box 11258Church Street StationNew YorkNY 10286USA

TelephoneUS Callers 1-888-BNY-ADRS (Toll free)InternationalCallers +1 610 382 7836Email [email protected]

www.lonmin.comwww.lonmin.com/sustainabledevelopment.asp

Designed and produced by Emperor Design Consultants LtdPhotography by Giles Barnard

Photography on pages 2 and 3Jewellery – reproduced with the permission of the Platinum GuildCatalyst substrates – reproduced with the permission of Johnson MattheyTemperature sensor – reproduced with the permission of Heraus, Hanau

Printed on Megamatt environmentally-friendly paper using solvent-basedinks by Greenaways, who are accredited under ISO 14001.

Lonmin Plc4 Grosvenor PlaceLondon SW1X 7YL

www.lonmin.com

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