Platinum miner Lonmin shares fall as it flags political headwinds
Shares in Lonmin fell as much as two per cent per cent to 233.5p per share today, after the platinum miner warned it could be hit by political and industrial headwinds in the near future.
It came as the broader mining sector was boosted by a better-than-expected economic data release out of China, the world's top metals consumer.
But the South Africa-focused firm said it was "conscious of a number of events occurring during this year's fourth quarter, including local government elections, wage negotiations, and various holidays, which have the potential to interfere with production."
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The fourth quarter is usually its strongest, with the "most uninterrupted work days". This prompted Lonmin to increase unit cost estimates for this year to as much as 10,700 South African rand, up from 10,400.
Platinum mining swelled 3.3 per cent year-on-year to 166,581 ounces in the last quarter, despite the number of workers decreasing by 19 per cent, it said.
The company, which was forced to conduct a massively discounted rights issue last year, also had net cash of $91m as of 30 June.
Another London-listed miner Vedanta Resources rose as much as 0.1 per cent at the open, before paring gains to trade 3.75 per cent lower at 552p.
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The Indian-based mining group's revenue shrank 21 per cent to $2.3bn in the quarter ended 30 June. It was dragged down by its oil and gas as well as zinc divisions, which shed 32 per cent and 38 per cent respectively.
Oil and gas came under pressure from the rout which has depressed crude prices, while zinc suffered amid significantly lower output.
Other mining stocks BHP Billiton, Antofagasta and Rio Tinto rose between one per cent and 2.8 per cent today, on brighter sentiment about the Chinese economy.
Caixin's China manufacturing PMI for July came in at 50.6, compared with 48.6 a month earlier. It rose above the key 50 level which indicates growth for the first time since February 2015.