Lonmin is struggling to find admirers among analysts, who have doubled the number of sell recommendations on its stock in the past two years. The world’s third-largest platinum producer has 16 sell calls, more than any other member of the FTSE/JSE Africa All Share index, data compiled by Bloomberg show. In September 2015, eight analysts suggested selling. "The story hasn’t really changed at all; they’re still the highest-cost major miner," Ben Davis, an analyst at Liberum Capital, said by phone from London. "The only real way out of it for them is for platinum prices to really start moving, but they’re still in the red zone for me. It just doesn’t make cash." After a life-saving $400m rights issue in 2015, Lonmin is focused on limiting cost inflation and seeking to break even at prices that are almost 30% lower than three years ago. Its task is made harder by the rand’s appreciation of about 6% against the dollar in 2017, reducing the boost to profitability from having operating exp...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.