Platinum miner Lonmin denies emergency call for fundraiser

By HOLLY WILLIAMS
Published on 20/08/2012 00:00

PLATINUM miner Lonmin is said to be considering a $1 billion (£640 million) emergency fundraising move to recoup losses following the closure of its South African mine where unrest claimed the lives of 34 people.

The group dismissed the report as “speculation”. But it is thought Lonmin may be forced to make a cash-call as the closure of its biggest mine in South Africa puts a significant strain on its income.

Lonmin is also believed to be asking for leniency from its banks as it struggles with debts.

The miner is expected to give wildcat strikers at its Marikana mine in South Africa until the end of the start of their shifts today to return to work or face dismissal.

The London-listed mining giant issued the ultimatum last week, but has extended the deadline following fatal violent clashes between strikers and South African police. The Marikana mine accounts for around 90 per cent of the group’s output.

The mining giant was already under pressure before the mine closure after platinum prices slumped in the past year as demand for the metal has dropped from carmakers in the crisis-hit eurozone.

Its woes have also been compounded in the past week by news that chief executive Ian Farmer has been hospitalised with a “serious illness” and will be temporarily replaced by chairman Roger Phillimore.

A spokesman yesterday added that safety of its workers was a top priority before reopening the Marikana mine.