Lonmin CEO Ben Magara is battling to keep the company going in the face of at least four powerful "enemies": low commodity prices, a huge debt pile, bloated staff levels and violence on the platinum belt. It can control only two. First, Lonmin can — at a stretch — reduce its debt pile of US$154m. But it can do this only if investors, who have already lost 96% of their investment in the past five years, accept yet another rights issue. In the six months to March Lonmin paid $34m to service this debt and other financing expenses. Which leads to the second factor. In an attempt to keep going, the company last week announced yet another round of retrenchments, aiming to cut 1,139 jobs by December. It has already lost more than 5,000 in the past five years. The target is to reduce overhead costs by R500m by financial year-end September. Unions won’t make this task easy. But Lonmin is fully aware it will have to do more. A number of people have been killed on the platinum belt in the past...
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