Lonmin is the third largest primary producer of Platinum in the world, producing over 900,000 ounces of Platinum and a similar number of ounces of the other Platinum group metals such as Palladium and Rhodium. Its operations are located in the district of Marikana, near Rustenberg, in the North West Province of South Africa.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 30/09/2005)

Platinum extraction: 100%

Record figures out tomorrow and recent low price in very strong metals market means this is the one to be on today.

Independent.

The week ahead.     By Andrew Dewson.     Published: 02 May 2006

A strong first half from mining group Lonmin could see the company promoted to the FTSE 100 in June. The world's third-largest platinum miner has a market capitalisation of 3.8bn, more than 1bn more than Daily Mail & General Trust, the current favourite for demotion. Despite some relative weakness in metal prices last week the market will still be expecting bumper first half profits, with consensus forecasts of $284m in underlying pre-tax profits.

imho the share price will go over 2900 after tomorrows results.

LONDON (Reuters) - South African miner Lonmin (LMI.L: Quote, Profile, Research) posted a doubling of first-half profit on Thursday, helped by soaring platinum prices, and said it was on track to grow platinum production to 1.3 million ounces in 2010.

Lonmin, which published first-half production data on April 25, said in a statement it made a pretax profit of $288 million (157 million pounds) before special items in the six months to end-March. The interim dividend was raised 50 percent to 45.0 cents.

UBS has just issued a buy rating for Lonmin with a 35 target.

Mining Weekly.

Lonmin half-year profit doubles, confirms platinum target.

LONMINSouth African miner Lonmin posted a doubling of first-half profit on Thursday, helped by soaring platinum prices, and said it was on track to increase production to 1,3-million ounces in 2010.

The price of platinum has risen by a third to $1 175 per ounce over the past year.

"Crucially, this price momentum is underpinned by strong demand, particularly from the autocatalyst sector," chief executive Brad Mills told reporters.

"Reflecting our confidence in the outlook ... we have today declared an interim dividend of 45 cents per share, an increase of 50%," he said.

Citigroup, which rates Lonmin shares a "Buy", with a 3 000 pence target, said in a broker note: "Importantly, Lonmin joined the 'cash returners' club (by) lifting the half-year dividend."

Lonmin, which published first-half production data on April 25, said in a statement it made a pretax profit of $288-million before special items in the six months to end-March.

Underlying earnings per share rose 152% to 110,3 cents, towards the top end of expectations.

Lonmin shares, which have tripled in value over the past 12 months as the price of platinum has risen and after a failed takeover approach, were 0,8% higher at 2 812 pence in early trading to value the business at 4 billion pounds.

On April 25, Lonmin said it had a record first half, with platinum production up 12% to 502 000 ounces, and still expected 1-million ounces of platinum production in the full year.

The London-listed company also said at the time an 11-day closure of a smelter in early April to fix a leak meant annual platinum sales would be around 970 000 ounces to 980 000 ounces. Mills said on Thursday the cost of that leak was not material.

First-half costs rose 0,5% "net of by product credits over the same period last year, despite a major furnace rebuild undertaken during the six months and the South African inflation rate running at some 4,5%," Lonmin said.

On February 24, Lonmin said it was no longer in talks about a possible takeover, having announced the approach a week earlier.

Barrick Gold Corp and Gold Fields - the world's first and fifth-biggest gold producers, respectively - had both made tentative approaches to Lonmin, sources close to the situation told Reuters.

Mills said the company had received no approaches since.

UBS said in a note: "We continue to like the fundamentals in the platinum industry, (the) restricted new supply driven by operating issues as well as the strong rand, and strong demand.

"Additionally, Lonmin has indicated it could be part of the ongoing consolidation in the mining sector."

June 2006 (Bloomberg) -- Shares of Lonmin Plc, the world's third-largest platinum producer, said it may buy back shares and forecast ``strong'' earnings growth through 2007.

Lonmin is ``very bullish'' on platinum prices over the next three to five years as demand growth of between 5 and 7 percent a year outstrips supply, Mills said in an interview from London today. Share buybacks and increased dividends are ``part of what we're thinking about,'' he added.

BHP Billiton, Anglo American Plc and Rio Tinto Group, the world's biggest mining companies, are returning billions of dollars to investors as metal prices soar. While Lonmin is benefiting from a 24 percent gain in the platinum price this year, it lacks the spending commitments of larger Johannesburg-based rivals Anglo Platinum Ltd. and Impala Platinum Holdings Ltd.

``That leaves share buy-backs or special dividends as an option,'' said Simon Hudson Peacock, who is part of a team that manages the equivalent of $5.1 billion at African Harvest Fund Managers in Cape Town. ``Those increase return on equity and make the share more attractive.''

Lonmin is considering how to ``return capital effectively to our shareholders,'' Mills said. Stripping out convertible bond costs, first-half profit more than doubled to $157 million.

Lonmin's market value more than doubled in the past year as platinum prices rose to record levels. On Feb. 17, Lonmin said it was in talks that may lead to a takeover, sending its shares soaring 25 percent. Seven days later, it said the discussions had been terminated.

Investors should buy Lonmin because it is a takeover target, Merrill Lynch & Co. said.

Lonmin operates three mines in South Africa, the largest producer of the metal and the home to the world's biggest platinum deposit, the Bushveld Complex.

``The fundamentals for platinum companies remain strong'' buoyed by a weaker rand that is lowering input costs and high prices, said Stephen Roelofse, who helps manage the equivalent of $37 billion at Sanlam Investment Management. ``Good demand from jewelers also provides a cushion.''

Demand growth for platinum used in catalytic converters for cars is being driven out of the U.S. and Europe, Mills said. Jewelry demand has also ``held up well,'' he added.

Joining FTSE 100

Lonmin has recently joined the U.K.'s benchmark FTSE 100 Index, which tracks the 100 largest stocks listed in London. Joining an index can boost a company's stock price because funds that mirror the benchmark buy shares of its members.

About 29 billion pounds ($54 billion) track the FTSE 100, according to Citigroup Inc. Stocks automatically join the FTSE 100 if they are among the 90 biggest in Britain by value when the quarterly review occurs. Lonmin's inclusion, as well as that of Vedanta Resources Plc, India's largest producer of copper and zinc, takes the number of mining companies in the index to eight.

If Xstata fails in todays bid for Falconbridge then Lonmin could well be the next target. (see two articles below).


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Nick Fletcher
Wednesday June 28, 2006
The Guardian

Mining group Xstrata lost 51p to 19.04 on talk it could embark on a big acquisition spree if it loses out in the complicated bid battle in Canada centred on Inco and Falconbridge. If Xstrata decides to walk away, it would cash in its stake in Falconbridge which is worth around $3.8bn. "Xstrata is now effectively holding a multi-billion dollar war chest and is bound to look to consolidate further investments," said analysts at Numis. "That at least puts other miners in the merger and acquisition spotlight." It picked Antofagasta, down 6p to 400p, and Lonmin, 56p lower at 26.90, as potential takeover targets.

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Nick Hasell - The Times - June 29, 2006

Lonmin up as Xstrata dips on seesaw of takeover talk.


LONMIN and Xstrata traded in opposite directions amid speculation that the platinum miner could become a target for the Anglo-Swiss metals group if its bid for Falconbridge fails.

The 3.8 billion offshoot of the late Tiny Rowlands Lonrho is no stranger to predatory interest, having received and rejected a bid from an unnamed rival in February.

Yet the longer-term fate of the company, which rejoined the FTSE 100 this month, has again become the subject of speculation after Mondays proposed $40 billion takeover of Inco and Falconbridge by Phelps Dodge, the Arizona-based copper miner.

Yesterdays interest in Lonmin stemmed from suggestions that TD Securities, Xstratas financial adviser in Canada, has urged the company to increase its bid for Falconbridge where it owns 20 per cent from the current C$52.50 a share in cash. Numis Securities believes that a recent fall in the implied prices of the rival paper-based bids on the table for Falconbridge might give Xstrata scope to raise its offer to above C$60. Alternatively, should Xstrata not succeed, the broker cites Lonmin as a potential consolation prize. Lonmin added 31p at 27.21, with Xstrata 26p cheaper at 18.78.

As you can deduce by clicking here and reading posting number 15  Xstrata could now bid for Lonmin.

imho this is the value play amongst the miners at the moment.

With much promise of a takeover and a comparatively low share price I agree with you on this one. Lonmin looks a good buy amongst the miners.

Lonmin goes ex-div tomorrow so anyone holding shares will get dividend payment. If you sell the shares on Thursday you will still recieve the dividend.

Lonmin PLC
05 September 2006


THIS ANNOUNCEMENT REPLACES THE LONMIN PLC SMELTER INCIDENT ANNOUNCEMENT RELEASED TODAY AT 10.25am UNDER RNS NUMBER 4927I. THE ANNOUNCEMENT HEADLINE SHOULD HAVE READ FIRE AT PRECIOUS METALS REFINERY AND NOT SMELTER INCIDENT AS PREVIOUSLY STATED. ALL DETAILS IN THE ANNOUNCEMENT REMAIN UNCHANGED.



Lonmin announces that there has been a minor fire in its Precious Metals
Refinery which has now been fully extinguished. There were no injuries as a
result of this incident and no permanent environmental damage. The Refinery has
been shut down and we are currently assessing the time needed to recover to full
operations with initial estimates of downtime of between 5 and 7 days.


We are investigating the impact on full year sales which could result in the
deferring of up to 25,000 ounces of Platinum sales for 2006 into the first
quarter of the 2007 financial year. A further announcement will be made when the
detailed investigation is completed.

Business Report - September 28, 2006

Lonmin paints a bullish platinum picture - By Justin Brown


Johannesburg - The world's third-largest platinum producer, Lonmin, painted a bullish picture for the platinum metal market this week.

South Africa produces about three-quarters of the world's annual mined supply of platinum, which is mainly used in auto catalysts to reduce vehicle emissions and for jewellery.

Lonmin said that until 2010 the price of platinum was likely to be "healthy", while the outlook for beyond 2010 would be driven by Chinese growth and tighter emissions law.

In May, the spot price of platinum climbed to a record $1 337.50 an ounce. Yesterday afternoon platinum fixed at $1 140 (R8 736) an ounce, $13 higher than its fix at the same time on Tuesday.

A platinum price of $1 000 an ounce was required for a new 20-year-life mine to come into production, Lonmin said.

The key platinum metals - platinum, palladium, rhodium and iridium - were far less abundant than gold, Lonmin said. In history, 150 000 tons of gold had been mined, compared with 9 500 tons of platinum. "Platinum group metals are the rarest of all elements," it said.

The key driver of platinum was increasingly onerous emissions controls, especially in the US, Europe and Japan, Lonmin said. In particular, car makers manufacturing diesel vehicles were an area of demand for platinum. Demand from the diesel sector made up about 50 percent of platinum auto catalyst demand.

Global growth in platinum demand from the automotive sector grew 9 percent in 2004, with a 17 percent growth in the EU. Europe is an important area of global demand for platinum auto catalysts, as 50 percent of vehicles in Europe use diesel engines. In the US, only 4 percent of vehicles have diesel engines. However, Lonmin expected diesel engines to reach a 10 percent market share in the US in the future.


Record prices for platinum were reducing volumes of platinum jewellery sales, but not total US dollar spend, Lonmin said. At a result of the high prices, platinum jewellery was increasingly facing competition from palladium and white gold jewellery.

Other industrial uses for platinum are glass, electrical and automotive, turbine blade, biomedical, chemical and petroleum sectors.

In the glass sector, demand was for flat screen televisions, where platinum and rhodium is needed. This area was forecast to see 7 percent a year compound growth in demand.

During 2006, double-digit growth in platinum from the glass sector was likely to be boosted by demand flowing from the soccer World Cup and ahead of the 2008 Beijing Olympics.

In 2007, Lonmin is aiming to spend $20 million on exploration in Africa, especially South Africa, and Canada.

In South Africa, Lonmin owns the Marikana and Limpopo mines, and is looking to build the Pandora project near Rustenburg in the North West. A prefeasibility study started at the project at the beginning of February.

Mining Weekly - 21 October 2006

How platinum No 3 took No 1 spot in rights conversion race


The recent spate of prospecting and mining rights conversions from old- to new- order rights, including, in the last week, conversions for platinum producer Lonmin, diamond-miner De Beers and uranium exploration and development company sxr Uranium One, may have alleviated some of the concerns surrounding the conversions of minerals rights, but for others, contention still lingers.

Since the implementation of the Mineral and Petroleum Resources Development Act (MPRDA) in 2004, which placed custodianship of all mineral rights in the hands of the State rather than private mining companies, criticism has arisen over the apparent delays in processing conversion applications by the Department of Minerals and Energy (DME).

Chamber of Mines statistics indicate some 8 420 conversion applications were received between May 2004 and July 2006, of which 15% have been approved, 27% have been rejected and 55% are still pending.

However, when director-general Adv Sandile Nogxina told audiences at the Africa Down Under conference in Perth earlier this year that a new DME geographical-information-system-based cadastral system had been established to process licensing applications, he said that only 7% of applications had been delayed according to the latest assessment.

He also offered his assurance that the new system would lead to faster turn-around times for the processing of prospecting and mining applications and announced that mineral rights would be granted to mineral explorers within six months from the date of application, while mining rights would be granted within 12 months.

Nogxina attributed the 'teething problems' that had arisen with the implementation of the charter to the lack of a common interpretation of the law. He also said that during the first years of implementing the legislation, the DME requested that applicants supply information to supplement their applications, a process that would create the impression of delay.

He added that workshop-based assessments of the situation had shown congruence and a notable improvement in the quality of applications received.



Praise for Lonmin

At the recent announcement of Lonmin's conversions, the DME praised the company's conversion and Minister of Minerals and Energy Buyelwa Sonjica said that the company was a model to be followed, even by its larger rivals, Anglo Platinum and Impala Platinum.

The South African government had converted the old-order mining rights of Lonmin's Marikana operation to new-order mining rights, making Lonmin the first platinum producer to acquire the necessary conversions. The company's South African operating companies - Western Platinum and Eastern Platinum - are now entitled to mine the property in question for the next 30 years, giving Lonmin the right to apply for a renewal for another 30 years thereafter.

Sonjica said that Lonmin's rights conversions are proof that the new mining legislation is working, adding that the granting of mineral rights provides fertile ground for government to achieve its ambition to develop a competitive mining industry that benefits the people of South Africa.

But what lessons could Lonmin offer the rest of the industry? Two key lessons, it appears, are that as much attention has to be given by miners to the other pillars of the mining charter as to equity owner-ship, while the approach taken should be responsive rather than adversarial.

An example was Sonjica's praise of Lonmin's social and labour plans implemented, while Nogxina applauded the company's proactive approach in engaging with the department on its programmes.

The MPRDA has been pivotal in transforming South Africa's mining industry through the introduction of the broad-based socioeconomic empowerment charter. The charter outlines the creation of employment and the advancement of social and economic welfare through appropriate resource use. It also sets a framework to ensure that mining rights holders contribute towards the socioeconomic development of the areas in which they operate and targets a 26% ownership of mining companies by historically disadvantaged South Africans (HDSAs) by 2014.

Lonmin said that Western and Eastern Platinum had committed to certain undertakings within their social and labour plans and would be fully compliant with the South African Mining Charter within the agreed timeframes. CEO Brad Mills said that the company was committed to working with the DME to satisfy the undertakings made in its social and labour plan.

Sonjica expressed her satisfaction that the project Lonmin identified is in line with government's existing social development projects in the area of operation, one that is characterised by high levels of poverty and unemployment. She added that these were sustainable projects that would support communities and improve the individual's quality of life.

Mills expressed Lonmin's total commitment to transition in South Africa, and said that the company was committed to working with the DME to satisfy the under-takings made in its social and labour plan, achieving the company's objectives of trans-formation and empowerment.

The company's corporate social investment strategy has achieved distinction, particularly for its R700-million programme to eliminate hostel accommodation at its local mines and replace them with 6 000 employee-owned homes over the next five years.

South Africa's mining industry is infamous for its creation of single-sex hostels which house migrant workers from the rural areas. Particularly prevalent during the apartheid era, hostels are associated with social and health problems, including the spread of HIV/Aids and tuberculosis.

The plan was initiated following Mills's interrogation of the mineworker-housing situation over the past 18 months, during which he spent a night at one of the hostels himself.

He asserted that the current facilities have no place in a company with ambitions of being a modern, progressive enterprise and commented that the long-life orebodies in South Africa need a new approach to community relations and a strong emphasis on education.

He said that South Africa's mining paradigm needed to shift from the exploitation of low-cost, imported labour, to one with a stable and skilled workforce.

Lonmin engaged the services of the Desmond Tutu Peace Foundation over the past year in an effort to better understand employee and community needs. His efforts are now being translated into corporate social-investment programmes that focus on education, healthcare, leisure and housing.

In particular, Lonmin is committed to making a difference in education, a keystone of economic and social prosperity. Together with the Department of Education, the company plans to invest some R65-million over the next five years to improve education in and around Lonmin's mines in the North West and Limpopo provinces.

Sonjica urged South African platinum-miners to work hard to comply with the country's new legislation, citing Lonmin as an example. Now that Lonmin has done it, I hope the other local platinum majors will follow suit, she said.

Nogxina commented that Lonmin had fully met South Africa's legislative requirements and that the DME had met with other producers to ensure their compliance. The situation is simple: comply and you will convert, he asserted.



Other platinum producers criticized

The minister was less pleased with platinum giants Anglo Platinum and Impala platinum and expressed her disapproval at the slow progress that the two major local platinum-miners were making in complying with the country's new mining laws.

Both declined the opportunity to comment on Sonjica's statement, but Anglo Platinum's Simon Tebele says that the company understands what is expected of it in order to acquire new rights and has submitted its applications to the DME. He admits, however, that certain clarity issues over details in the legislation had arisen.

Anglo Platinum has had several disputes with the DME over the interpretation of the MPRDA and is currently pursuing legal recourse against the department in an attempt to seek clarity on certain rights issues. The platinum giant resorted to legal action over the DME's refusal to grant four prospecting rights to the company.

Anglo Platinum's head of legal services, Leon Bekker, says, We've gone to great trouble to under-stand what the law requires and the applications we have filed for conversions comply with these.

From a legal perspective there's no question about the security of tenure in respect of our existing mining operations. The DME acknowledges in many public forums that they don't have the discretion to refuse these conversions. Bekker says that the DME has a vision of what it wants to see in terms of black economic empowerment in the platinum industry and is looking for ways that companies such as Anglo Platinum can help to achieve this. We're trying to see what they want and whether we can accommodate it, he comments.

Bekker points out that, unlike other mining companies that have created a lot of new BEE share-holders by transferring the 26%stipulated by the mining charter by way of equity, Anglo Platinum does not think that this will really achieve the empowerment objectives of the MPRDA. He says that the Act wants to see the active involvement of BEE partners in the mining operations rather than passive dividend receivers. Unfortunately, that makes the empowerment process more complicated, he says.

The definition of what empowerment is has been bedevilled by the MPRDA and the charter, which are not talking to each other, he asserts, explaining that the definitions of what constitutes a previously disadvantaged person (PDP) or an HDSA differs. While the HDSA percentage requirements in the charter are readily achievable, Bekker emphasises that it is relatively easy to clothe a company with HDSA status while a meaningful and substantial portion of the benefits from that company may very well not end up with individuals who are PDPs as required under the MPRDA. The charter requires that 26% of mining assets are sold to BEE stakeholders and, rather than selling shares, Anglo Platinum has sold and is selling its rights to minerals in projects and also interests in the rights to minerals and assets of operating mines.

Bekker says that, regardless of the structure, Anglo Platinum contracts ensure that both the BEE objectives of the MPRDA and the 26% charter requirement are complied with so that a meaningful and substantial interest in the mining assets and the benefit there from end up with HDPs. I think this has made us different from other companies, he posits.

Achieving BEE requirements is more of a how than a what question, quips Bekker.

The DME's refusal of four of Anglo Platinum's new prospecting rights applications is mainly based on the company's lack of compliance to carry out the requested BEE participation in the proposed prospecting projects for which the applications were made. However, Bekker points out that, in the case of prospecting rights, the BEE request is just that, a request, and not a compulsory requirement.

He adds that the refusal has no effect on the company's conversion applications. The problem with the refusal by the DME is that it hampers our ability to plan properly and to optimally exploit the resources that we have, with respect to other operations.

Certainty comes with time. Maybe, as the DG has said with respect to the litigation, the positive implication of the pending litigation is that the courts should clear up what the legal position is and then we will all know, says Bekker.



Rights granted

Not all mining companies are frustrated with the department on the conversions front, however.

Gold producer AngloGold Ashanti, like Harmony, has been awarded its new-order mining rights.

AngloGold Ashanti public affairs manager Alan Fine tells Mining Weekly that the company recognises the conversions process for what it was - a new area of activity.

In this respect, he says that it has been a learning curve for AngloGold Ashanti and the DME, which had been in consultation over conversions since 2003 and continue to engage with each other.

Following a redraft of its social and labour plans, AngloGold Ashanti received its new-order mining rights in August last year, within one year of submission, in July 2004. In two areas, the requisite notarial agreements have been finalised in the first and will be finalised in the other shortly. We are committed to the targets and are comfortable with the spirit of the mining charter, asserts Fine, adding that the company never took a legalistic approach to the charter, but approached rights conversions in the spirit and attitude of a process of transformation.

He acknowledges that the process has taken longer than the DME envisaged and that the new legislation is not always explained in an investor-friendly way, but asserts that the department did not require anything that was impossible to give and did not make sense in terms of good management practice.



Legal issues

Webber Wentzel Bowens partner Manus Booysen points out that the new legislation is characterised by certain shortfalls and a lack of clarity.

He says that the new mining law regime is a quantum leap from the previous one, which was a regulatory process and licensing process related to private property law. While the role of the State was originally limited to regulating the exercise of prospecting or mining rights, the State now grants and regulates rights to mines, which are under the jurisdiction of the DME.

He points out that the department places a strong emphasis on BEE, which may be beyond what the Act requires in some cases.

While mining rights conversion applications require a statement and description of how the stakeholder will give effect to the BEE component of the mining charter, no BEE transaction is required for the conversion of prospecting rights.

This makes sense, since exploration activities are expensive and small new businesses can seldom risk funds on exploration.

In practice, however, Booysen says that the DME sometimes requires detailed binding agreements for conversion of mining rights and is not always prepared to grant conversions on the basis of memoranda of understanding or other agreements.

He says that the DME sometimes takes a negative view of dilution provisions in agreements and lock-in periods. Although it is common for shareholder agreements to stipulate that the BEE shareholder must retain shares for a minimum period . . .the DME says that BEE companies must be allowed to realise the value that they've achieved from the transaction. Booysen points out that this can make it difficult for mining companies that must remain BEE-compliant in terms of the MPRDA, since the company is not protected in the event that the BEE partner decides to sell. At this point, the company would then have to sell a further 26% in order to remain compliant.

He cautions that although every-one in South Africa and in the mining industry understands that BEE is essential to build the new South Africa, to take the requirements too far will ultimately become counter-productive. It becomes almost impossible to structure transactions that are acceptable to the DME and it delays the whole process, comments Booysen.

He concludes that, in light of the current commodity boom, it would be in the interests of the economy and the country, if the granting of new-order rights could be expedited.

Big fall last week this is in danger of dropping to 250p

Chart looks better now.

The bounce is back on..!

If it manages to break 1200p its all the way to 1400p.