Johannesburg - Lonmin [JSE:LON], the world’s third-largest platinum miner, said it was cash-positive in the first half of the year as it implements a cost-cutting plan to save the business.
Net cash was $114m at March 31, compared with net debt of $185m at September 30, the Johannesburg-based company said in a statement Monday. Even so, the producer made a loss of 1.8 cents per share in the half year, compared with a $1.65 loss a year earlier.
Lonmin, with the highest costs of the world’s three major platinum producers, was bailed out last year by shareholders, who injected $400m as the company sought to survive a 40% drop in the price of the precious metal since 2011. Lonmin has been cutting costs and trimmed more than 5 400 jobs in an attempt to become profitable once again.
The financial results “reflect the positive momentum in Lonmin”, chief executive officer Ben Magara said in the statement. “We have delivered on our promise to restructure and cut high-cost production.”
Platinum has rallied 19% this year to $1 057.62 an ounce, following a precious metal rally and a shortfall in supply.
The basket price of platinum group metals has climbed 15% to R13 913 an ounce. Lonmin’s production costs were R10 668/oz in the first half and are forecast to be R10 400 for the full year.
The company reduced its forecast for capital expenditure for the full year to $105m from $132m.