Aug 7 (Reuters) – Platinum miner Lonmin Plc said on Monday it would cut costs and sell some assets, including processing capacity of up to 500,000 ounces per year, as it battles to overcome a weak market and to preserve jobs.
Shares in the South African miner rose 1.7 percent by 1020 GMT in response to Monday’s announcement, although some analysts said it would be important to see what terms Lonmin is able to agree with potential buyers. So far this year, its shares have fallen more than 35 percent.
Platinum miners in South Africa face an array of obstacles, including very deep, narrow seams, political instability and a stubbornly low platinum price of around $950 an ounce.
A weakening rand has added to inflationary pressures for South African miners, which earn revenue in dollars but pay costs in rand.
Over the year to date, the rand has strengthened against the U.S. dollar, but it is expected to weaken over the next six months, a Reuters poll found last week.
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