Lonmin (LMI) increased its net cash position in its fourth quarter, from $86m (£66m) to $103m. This was the one sign of encouragement in an otherwise frightening trading update from the South African platinum miner, which saw a third wiped off its share price as investors awoke to the possibility of heavy impairments, rising costs and covenant breaches.
Although sales improved in the three months to September, trading “remains tough”. In a worrying continuation of an unsustainable trend, unit costs for the current financial year will probably creep above ZAR 12,000 (£651) an ounce, compared with a platinum basket price of ZAR 11,567 in the fourth quarter. Worse, any guidance may be ultimately irrelevant: an operational review – which is consuming management’s “undivided attention” – may necessitate asset impairments, and has delayed results due on 13 November.