Lonmin under pressure on fears over prospects for debt

Lonmin plc’s shares fell in London, bringing the decline in its market value this year to 90 per cent on concerns the world’s third-largest platinum miner will struggle to refinance its debt. The company has to renegotiate $544 million of debt facilities by the middle of next year, as weak platinum prices, down by half since a peak in 2011, mean its operations are burning through cash.

It already drew down a $400 million facility amid talks with bankers to restructure debt, two people familiar with the matter said this month.

Lonmin may cut up to 6,000 jobs and reduce annual output by 100,000 ounces, the firm said in July. Lonmin is the year’s worst performer on the FTSE All-Share Index of equities. It remains confident in the long-term fundamentals of platinum-group metals. – (Bloomberg)