CAPE TOWN – As South Africa commemorates the fifth anniversary of the Marikana shooting, Lonmin – which saw police gun down 34 mineworkers at a koppie outside the platinum producer’s Marikana Mine – today is a shadow of its former self and the platinum sector decimated. Around 80% of platinum mines in South Africa are under water and earnings negative at current spot prices.
In the past five years 70000 jobs have been lost in the industry as companies grappled to stay afloat, and another 20000 mine workers face the prospects of losing their jobs as AngloGold Ashanti, Bokoni Platinum Mine and Sibanye Gold flagged that they would mothball shafts.
Since 2012 Lonmin once valued in billions, has lost most of its market capitalisation and is now South Africa’s worst performing platinum stock on the JSE. On August 14, 2012, its market cap was £18.32bn (R317.38bn) and yesterday it was only at £307.85 million.
Lonmin’s share price has plummeted 98% mainly as result of a R5.7bn discounted rights issue to keep afloat in 2015 after being battered by protracted wage strikes, rising input costs, a weak platinum price and slowing demand for the metal in tandem with its peers.
Rene Hochreiter, a mining at Noah Capital Markets said yesterday that the platinum price had plummeted from around $1300 an ounce in August 2012 to the current $980 an ounce level.