Shares in platinum producer Lonmin fell today despite investors initially applauding its efforts to become a lower-cost operator in an increasingly testing market.
The Johannesburg-based firm axed 5,077 jobs as of 27 January, or 84.6 per cent of its planned reduction in headcount. The company had faced pressure from the government and labour unions to maintain jobs.
"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," it said in a statement.
Shares in Lonmin rose as much as 9.3 per cent to 62.85p per share this morning, before closing 4.78 per cent down at 54.75p.
Lonmin maintained its full-year production guidance of 700,000 platinum ounces and its capital expenditure plan of $132m (£92.2m) despite plunging prices.
Refined platinum production rose 22.6 per cent during this period to 171,441 ounces, after its smelting plants "operated well" compared to a year earlier when they suffered shutdowns.
The company said its business model "assumes that a low pricing environment will persist in the short to medium term and we are managing our business on that basis". Platinum prices have fallen 50 per cent over the last five years.
It's been crippled by plunging prices, as well as rising costs and a series of strikes. However, the company plans to shutdown unprofitable mines to eliminate more than 100,000 ounces of high-cost production.
It was forced to tap shareholders for $396m in December, ahead of a deadline to refinance its debt.