LONDON – Lonmin LML.L reported weaker than expected output on Thursday, causing analysts to raise doubts over 2017 production targets, and faced demands for compensation following the shooting of 34 miners at Marikana in South Africa’s platinum belt.
The company reiterated its sales guidance for 2017, but said larger shafts, known as generation 2, had disappointed and production from them was 5.2 percent lower in the final three months of last year than in the previous year.
The production shortfall added to steep losses for Lonmin’s volatile share price. It was down more than 16 percent by 1230 GMT. The wider sector was roughly flat. .FTNMX1770
Platinum prices XPT=, which rose just one percent last year, have failed to join a rally in other commodities and Lonmin has lagged the wider recovery in the mining sector that started last year. Lonmin said it was maintaining its focus on generation 2 shafts, while trying to cut its capital spending.
“We remain committed to delivering sustained productivity improvements at our operations to ensure the long-term viability of the business,” Lonmin said in a statement. Its London AGM attracted a protest demanding the company be held responsible for the incident dubbed the “Marikana Massacre” when in August 2012 South African police shot 34 striking mine workers.
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