Lonmin is in a hole as losses soar past £150m mark due to currency moves

Platinum miner Lonmin plunged further into the red as currency moves and lower production hit trade.

For the half year, Lonmin made a loss of $199 million (£154 million), far worse than the $21 million lost last time.

It blamed that largely on a $146 million “impairment charge” due to a strong South African rand which pushes up dollar costs.

The figures were bad enough for Lonmin to warn it could breach covenants on its debts.

It has agreed with lenders that its net worth won’t fall below $1.1 billion. Today its “tangible net worth” was at $1.4 billion.

The firm said the risk “has been flagged to the group’s lenders and is being managed proactively through regular engagements with them”.

Analysts at Liberum Capital repeated their advice to clients to sell the shares. They today fell 4% to 107.46p.

Ben Magara, Lonmin chief executive, said: “The whole Lonmin team working in partnership reversed the weak mining performance seen in the first four months of our financial year. That improvement continues to be essential for the sustainability of the business.”