Lonmin to raise £497m to cut debt

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South African miner Lonmin, the world’s third-largest platinum producer, is to raise £497m from shareholders to cut debt and finance a recovery after weeks of strikes in which dozens were killed.

It will use the underwritten rights issue to restructure the balance sheet as soon as possible, the company said. In August, Lonmin’s Marikana mine was the scene of South Africa’s most violent episode since the end of apartheid, when police shot dead 34 people involved in wildcat stoppages battering the country’s already beleaguered platinum industry.

Most of Lonmin’s miners have since returned to work, but the producer – which even before the walkouts and illegal strikes had one of the most stretched balance sheets in the platinum sector – said it had lost 110,000 ounces of production and scaled back long-term plans to boost output and sales.

Lonmin said efforts to ramp up activity after weeks of strikes were progressing better than expected, but the return to business as usual would take months.