South African platinum miner, Lonmin, is likely to maintain sales of around 750.000 platinum ounces in the medium term, it has emerged.

This will be supported by capital expenditure of between $250 million and $350 million a year. “We will continue to manage a balance between capital investment and maintaining a sound balance sheet,” CEO Ben Magara said in the company’s latest annual report.

“Consequently, capital spend in any year will be subject to prevailing market conditions. Despite the significant inflationary pressures we face, we would expect to contain increases in unit costs to below wage inflation,” Magara added, saying the company looked forward to stable predictable operating environment next year.

Early this year, Lonmin’s majority union, the militant Association of Mineworkers and Construction Union (AMCU), downed tools on 23 January 2014, demanding a basic wage of R12.500 ($1071) at the three largest PGM producers in South Africa, Amplats, Implats and Lonmin.

The three affected producers were all clear that such demands were impossible to meet if the companies were to remain viable companies, and protect jobs and investment.

Lonmin negotiated and communicated collectively with its peers. That was the right thing to do, but it did not stop the companies working towards building better relationships with AMCU. On 24 June 2014 an agreement was reached for a return to work. “We believe we can have real confidence in this three year agreement as there is an undertaking that there would be no industrial action in its duration in respect of the issues covered by the wage agreement,” Magara said.

“We also concluded agreements with our minority unions to ensure that every employee can be heard. Behind the scenes much was being done. We took early decisive action during the strike to protect the business,” he added.