Platinum producer Lonmin scales back spending plans

Lonmin scaled back spending plans to weather a platinum price slump that may last two more years. The world's third-biggest producer of the metal cut its capital expenditure forecast for this fiscal year to $160 million (€143 million) from $185 million. It also capped annual spending until September 2017.

"We should possibly see these persistent prices lower for longer," chief executive Ben Magara said yesterday. Lonmin doesn't expect prices to recover for about two years, the Johannesburg-based company said.

Lonmin and larger competitors Anglo American Platinum and Impala Platinum Holdings are battling prices that have tumbled 36 per cent since 2011 while salaries and operating costs have climbed. Lonmin plans to cut about 3,500 jobs, or 10 per cent of its wage bill, to save cash. – (Bloomberg)