[miningmx.com] — LONMIN, the world’s third-biggest platinum producer, restarted dividends after posting a better-than-expected swing to full-year profit on Monday as prices and output recovered.
The group’s shares jumped 2.03% to R201 around 12:00, outperforming a 0.39% fall in the JSE’s resources index.
“The time is now right to recommence dividends,” CEO Ian Farmer told Reuters.
Lonmin, recommended a payout of 15 cents per share and launched a new dividend policy.
The company will pay one dividend a year, seeking to maintain the initial level and increase payouts through special dividends.
Lonmin posted earnings per share of 70.2 cents for the financial year to the end of September, compared with a loss of 59 cents last year.
Lonmin, which has had repeated problems with its main furnace, sold 706,000 ounces of refined platinum compared to guidance of 700,000 ounces and last year’s level of 682,955 ounces.
The group was forced to close its troublesome No. 1 furnace again in May shortly after being repaired and had to send material to be processed by rivals, adding to costs.
The No.1 furnace, which was rebuilt last year, has a history of problems and shutdowns and has often forced the firm to cut sales guidance.
The price of platinum has gained 14% so far this year to trade at $1,667 per ounce, but is still well below the peak of $2,290 touched in 2008.
The price has been buoyed by a recovery in the battered auto sector since one of the metal’s key uses is for catalysts to clean pollution from vehicle exhausts. The other main use is for jewellery.
Farmer was upbeat about the platinum market tightening next year.
“We’re gradually getting into firmer territory … I think as we head into 2011 and auto markets gradually firm, I think we’ll move back from currently balanced markets to small deficits in about 2012,” Farmer said in an interview.
He also said that South Africa was moving to clear up ambiguities in its mining rights legislation after Lonmin was forced to go to court to defend some of its rights.
“The minister of mines has made it clear that she believes that there are weaknesses in the current legislation that governs these issues, and that the legislation should be tightened up in the new year.’