Lonmin 'deeply regrets' Marikana mine deaths

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Lonmin says it "deeply" regrets the deaths at its Marikana platinum mine in South Africa after clashes between police and strikers.

More than 30 people were killed on Thursday when police opened fire after failing to disperse strikers armed with clubs and machetes at the mine.

The mine has been at the centre of a pay dispute, made worse by tensions between rival trade unions.

Shares in Lonmin fell by about 8% on Friday morning before recovering.

The company's share price has fallen by more than 12% since the clashes began.

In a statement, Lonmin chairman Roger Phillimore said: "We are treating the developments around police operations... with the utmost seriousness.

"It goes without saying that we deeply regret the further loss of life in what is clearly a public order rather than labour relations associated matter."

Speaking on Thursday, President Jacob Zuma said he was "shocked and dismayed at this senseless violence".

'Negative effect'

Start Quote

The South African platinum industry is battling not only a lacklustre platinum price... but also increasing depths, declining grades and more complicated metallurgy”

End Quote Charles Gibson Edison Investment Research

Platinum is used in catalytic converters which reduce vehicle emissions, and is widely used to make jewellery.

Lonmin's operations are situated in the Bushveld Complex in South Africa, where the majority of the world's platinum comes from.

Anglo American Platinum produces 40% of the world's platinum from its mines in the area.

Its London-based parent company said production was currently at normal levels.

But a spokesman told the BBC it was "watching the situation extremely closely".

The price of platinum on the international markets rose 4% on Friday to $1,460 per troy ounce.

Gideon du Plessis, general secretary of South African trade union Solidarity, said the country would suffer huge losses as a result of the clashes at the mine.

"South Africa's reputation as a stable investment destination is negatively affected by the violence, not only in the platinum industry but in general," he said.

On Thursday, Lonmin had said that the strike meant it would lose 15,000 ounces of platinum production, and as a result it was unlikely to meet its production forecasts for the full year.

"The extent of the variation from guidance will depend on the timing and speed with which normal operations can safely resume," the company said.

Mining analysts said the problems had come at an already challenging time for the industry.

"The South African platinum industry is battling not only a lacklustre platinum price, which has been subdued by the slowdown in demand for cars (and hence auto catalysts) and jewellery, but also increasing depths, declining grades and more complicated metallurgy, as production shifts to more difficult to mine reefs," said Charles Gibson, head of mining at Edison Investment Research.

Also on Thursday, Lonmin said chief executive Ian Farmer had been hospitalised with a serious illness. Chairman Roger Phillimore will run the company in his absence.

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