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Lonmin considers fundraising talks

Platinum miner Lonmin said it has been considering launching an emergency fundraising move to recoup losses after major disruption at its South African mine that saw 34 workers shot by police.

The group added that it was also in talks with its lenders as it said it may breach banking agreements when tests are due on its banking facilities on September 30.

Lonmin said it was "reviewing all the options" to bolster its ailing balance sheet, including a cash-call to investors through a rights issue. Lonmin's shares have suffered in recent days amid broker downgrades following reports it is considering a one billion US dollar (£640 million) rights issue.

Deutsche Bank, for example, recently estimated that Lonmin will lose at least 50,000 ounces of production as a result of the crisis and said it will make a loss this year, having previously expected a small profit.

The closure of its biggest mine in South Africa has put a significant strain on its income, with the Marikana mine accounting for about 90% of the group's output.

The mining giant was already under pressure after platinum prices slumped in the past year as demand for the metal has dropped from car-makers in the crisis-hit eurozone.

Its plight has also been compounded in the past week by news that chief executive Ian Farmer has been admitted to hospital with a "serious illness" and will be temporarily replaced by chairman Roger Phillimore.

But Lonmin is hoping disruption will end soon as staff begin to return to work. It confirmed that about 33% of 28,000 employees returned to work, but that only one in five wildcat strikers reported for duty.

Platinum miner Lonmin had ordered 3,000 illegally-striking rock drill operators to return to work at its Marikana mine or risk losing their jobs, while it appealed to a further 25,000 staff and 10,000 contractors to report for duty.

But it backed down on its threat to sack absent workers as it looked to strike a more conciliatory tone in line with the official week of mourning declared by president Jacob Zuma. Many of its workers were put off by the fear of more violence, although Lonmin stressed the situation on the ground remained "calm".

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