Lonmin share price plummets alsmost 14 per cent as it announces 3,000 job cuts
Shares in troubled platinum miner Lonmin plummeted 13.9 per cent to 68.95p in late morning trading after it announced plans to close two of its mine shafts, putting 6,000 jobs at risk.
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In an update to the stock exchange this morning, the miner said its board had been forced to take "decision actions to reduce high cost production in an oversupplied market" after the price of platinum fell to below $1,000 an ounce, from close to $2,000 in 2011, closing its Hossy and Newman shafts.
In addition, the company will mothball a number of its Generation 1 shafts, which are managed by contractors.
The closures will reduce annual production over the next two fiscal years to 100,000 platinum ounces, it said.
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"Only the immediately available ore reserves will be utilised, reducing the overal costs of production and enhancing cash generation and profitability," it said.
"The consequences of these decisions will be that the remaining shafts will allow for a smaller, more sustainable and agile business."
Platinum isn't the only commodity hit in recent months: earlier this week Bloomberg's commodity price index, which tracks gold, crude oil and other raw materials, plummeted to 95.5 points, its lowest point in 13 years. The index has fallen by 40 per cent since 2011.