Lonmin output bounces back after hard year

SHARES in platinum miner Lonmin soared yesterday as it showed signs of shrugging off its troubles at Marikana last year.

The world’s third-largest platinum miner said yesterday that production in the first quarter had “substantially exceeded” the planned ramp-up to full platinum output.

Lonmin said it mined 2.7m tonnes over the year from the Marikana operations in South Africa, down just one per cent on the prior year.

Sales of the metal also jumped 16.7 per cent over the year to 108,342 saleable ounces.

The wildcat strikes at Marikana, which started in August, led to a six-week shut down and caused Lonmin to lose 110,000 ounces of production.

Platinum has also come under pressure from the slump in European car demand. The combination of violent strikes and a fall in demand led to Lonmin launching a $817m (£515m) rights issue last year.

The FTSE 250 miner yesterday reiterated its guidance of 660,000 ounces of platinum and spending guidance of around $175m for its financial year ending September 2013.

Alison Turner at Panmure Gordon said yesterday that Lonmin’s rapid recovery from the strike shows a “fundamental improvement” in Lonmin’s operating performance.

In addition, Lonmin has appointed HSBC as joint broker alongside JP Morgan Cazenove. Shares closed up 14.29 per cent yesterday at 360p, after losing almost half their value last year.