Lonmin to sell surplus platinum capacity to raise cash

Platinum miner Lonmin Plc said on Monday it would cut costs and monetise some assets, including processing capacity of up to 500,000 platinum ounces per year.

The company, which mines in South Africa, reported a 6.4 percent rise in costs for the third quarter.

Lonmin said its current cash position made it hard to sustain spending on its Rowland unit at Marikana, and that it would look for funding partners and "preserve" about 5,000 jobs.

The company said it plans to reduce annual overhead costs by at least R500-million  by Sept. 30, 2018.

It announced in May it planned to move its Johannesburg office to Marikana by the end of the year.

The move is expected to save "tens of millions" of rand, Chief Executive Ben Magara said at the time.

Lonmin is being hit by a subdued South African economy and inflationary pressures on the platinum mining industry, the company said.

A stronger rand against the dollar has also hurt the company as it pays costs in rand and earns revenue in dollars.

Lonmin shares have fallen by more than 30 percent this year.

- Reuters