Like most miners, Lonmin has been hit by the sharp fall in commodities prices. But it harbours a number of home-grown problems that raise questions over the company’s long-term viability. Lonmin has never really recovered from the 2012 Marikana tragedy, in which more than 30 striking miners were killed by security forces outside its mines. A five-month-long protest of platinum miners last year further hobbled the company. In the negotiations that brought an end to the protests, Lonmin lifted the wages of many of its staff, leaving the company with some of the highest labour costs in South Africa.
And, unlike many of its — admittedly battered — competitors, Lonmin has placed all its eggs in one product. But the price of platinum has halved since 2011, as demand for cars in the formerly-booming Chinese market has ebbed. More than half of world platinum demand goes to the production of catalytic converters.
That points to perhaps the biggest question mark over longer-term demand for platinum. Many analysts believe that the travails of Volkswagen — which has admitted to falsifying emissions standards — could hasten the end of the diesel engine. And with it, one of the key commercial uses of the silver metal
Why didn't i buy at 0.29c. Now its too late for 0.41c entry.
