South32 expects to start rebuilding at Mozambique project after post-election hit
Earlier this month, the company retracted its output prediction for the Mozal aluminum smelter in Mozambique.
Despite market rumours indicating otherwise, South Africa’s platinum producer Lonmin (LON:LMI) rejected Friday a reverse takeover bid by Xstrata (LON:XTA), its unhappy largest shareholder, as it announced a loss before tax of $698 million in the financial year ending in September.
Xstrata made the bid last month, proposing to sell its South African platinum group metals (PGM), chrome and vanadium businesses to Lonmin for shares, in return for an inter-conditional rights issue of $1 billion.
The Swiss miner owns 24.5% of Lonmin since 2008, after the failure of a $10 billion takeover offer for the platinum group. From that time Lonmin not only has been severely hit by a decreasing demand for its metals. The company has also accumulated huge debts and suffered the infamous violent strike at its Marikana mine in South Africa, where 34 people were shot dead by police.
The six weeks of strikes that followed the incident cost Lonmin, the world’s third-largest platinum producer, $159 million and 110,000 lost ounces of platinum, pushing the group to tap shareholders for cash.
Xstrata said on Friday its proposals were not attempts to gain control of the South African miner, but to protect the value of shareholders’ investment in the company.
“Lonmin has suffered longstanding operational problems and we are concerned that the business does not have the management capabilities to ensure a sustainable future, even if short term funding issues are resolved,” the diversified miner said in a statement. “We believe our concerns are shared by other major Lonmin shareholders,” it added.
The London-based mining company said Lonmin’s management had rejected its proposals without substantive engagement and said the platinum miner has never suggested a constructive solution to its administration issues.
Lonmin’s full financial results can be found here.
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