Lonmin Share Discussion Threads

[redbaron10] 10/9/2016 18:38

I totally agree with you harry_david,i'm just not sure of the time horizons here.How long is this demand/supply imbalance going to take to play out? Long-term pgm metal demand will rise because platinum recycling rates will struggle to fill the gap in supply/demand present at the moment.What is the short to medium term prospect? I'd prefer not to have a strike in the platinum sector to reduce pgm production and supply!!!This will have a proportionally larger negative effect on Lonmin of the big three producers.I see amcu is on strike at Sasol at the moment so they have their hands full.It's just very irritating that management have this distraction when this time of year is the peak production period.It's not as if Lonmin is 'Apple'who have an excess $250bn sitting in bank accounts outside of the US. Maybe Apple could start making platinum iphone 7s.Mr Cook help us out here buddy.

[harry_david] 10/9/2016 16:30

The World Platinum Investment Council has lent its support to a sharp drop in mined output and a 55% fall in unrecorded stock holdings from over 4 mil ozs to less than 2 mil since 2012. It was this enormous overhang that kept prices stable during the strike according to them.As recoveries from used catalysts are only increasing slowly there is nothing going to stop a very nice lift in prices fairly soon.

[redbaron10] 08/9/2016 11:56

This could start getting tricky for Lonmin.They are offering 6% as a pay rise but this isn't deemed enough.There is a month of prevaricating now,yet both Amplats and Implats know that even though a platinum strike is bad news for them,it could be catastrophic to Lonmin because of its precarious financial position.Anglo and Impala can sit back to a certain extent and leave Lonmin to be perceived as playing the tough guy in negotiations.Lonmin has the most to lose if there is another strike.

[lazyhisnibs] 08/9/2016 09:24

www.iol.co.za/business/markets/commodities/platinum-deficit-for-2016-to-be-higher-than-forecast-2065679

Headline: Platinum deficit for 2016 to be higher than forecast

If I'm reading the above correctly then overall it is positive on the supply side.

The comment about costs won't come as a surprise.

The gentleman who is (or was) heading up the regulator who had put the brakes on Eskom's attempts to continue with hyperinflation level tariff increases didn't get his contract renewed. That was a few months ago and I can't remember if he is still in place but if memory serves he won't be the next time they have their hand out for more. There'll most likely be above inflation increases for decades but he reined the virtual monopoly electricity utility in when it came to their attempts to get even more than that.

I think electricity in SA is still relatively cheap despite a drastic ramping up in tariffs over about a decade but I haven't done comparisons with other countries for a while.

[redbaron10] 06/9/2016 18:06

So the wage negotiations have stalled after more than a month of talks.At least few headed for the exit with only 600k shares traded today.So now we have to wait until next week for more talks to start(hopefully), and then week after that for the US Fed rate decision.Oh be joyful!

[redbaron10] 04/9/2016 15:07

Oversupply is the problem with platinum.When the price got to $1800oz,recycling of platinum from used catalytic converters became very lucrative and i remember when owners were having them stolen off of their 4x4s.It's still economically viable to recycle platinum from this source but with the price falls the big bucks have gone.Like gold prices,sentiment rather than supply/demand dynamics have a big effect on the platinum price.Indeed during the six month strike in the platinum mining sector back recently,the platinum price hardly budged even though production was nil.Once above ground reserves are depleted,this industry has a chance to set the platinum price market for themselves as opposed to speculators fixing prices in their own interest.Industry experts keep repeating there is a supply deficit every year,but it is never reflected in the platinum price rising.Taking out 100,000oz of high-cost produced platinum isn't going to make a dent.The simple reality is that there are too many miners creating expensively produced pgm ounces to make this industry viable with the current cost base.Either you put the price of the finished product up (which in platinum's case,the SA mining industry can't do unless they cut back radically on production) or you reduce your cost base which is the SA mining industry's preferred choice.To slash your cost base,the miners either have to take an axe to their capex for the following years which in effect is reducing investment spending which isn't a great idea for a mining company,or you tackle labour costs head on.Energy costs from Eskom aren't likely to cease rising with SA inflation (around 6.5%) because of the massive issues they've suffered from due to under investment,so the cost reductions must be made during these ongoing wage negotiations with amcu.Good luck Ben,you're going to need it.It's only the future of Lonmin at stake here.No pressure.How about a wage freeze for a year? The one satisfaction investors do have is that in the eventuality of it going pear-shaped for Lonmin,it won't be the shareholders having their shareholding diluted nearly out of existence like last time (on Lonmin bankers insistence apparently), the bankers will be on the hook next time i hope.

[harry_david] 04/9/2016 13:46

I see the retiring chairman of Implats is forecasting a collapse in platinum production following a lack of development, and a follow on upward shock to price. Talking his book perhaps but it could have been a help in the Friday share move.There appears a concensus on a supply imbalance now cutting back stockpiles but this is the first time I have seen such a strong comment from a mining leader.

[redbaron10] 03/9/2016 20:20

Get to 240p here,then 50p drop,then 20p rise,all on low trade (typical August) daily volumes.We saw resistance at the 200p level so that looks a good floor at the moment.We saw S.African municipal elections creating a lot of political unrest in S.Africa.We saw appreciable Rand depreciation on this,plus some dollar strength.We saw platinum prices come down markedly after speculation in precious metals (inc. gold) pushed prices ahead of themselves.Gold miners suffered the same fate,so the platinum miners were in good company.Impala platinum results disappointed,disconcertingly on added safety stoppages,which has implications for Anglo and Lonmin going forward.Apparently greater emphasis is being put on safety practices in the SA mining industry.There have been too many deaths and accidents lately, so understandably the miners' safety is paramount.Being an investor though,there are implications here for us.The PIC is still making noises over their large investments in Anglo and Lonmin so we'll see how this plays out.The amcu is still negotiating separately with the platinum miners so we need to hear how this is going.They started roughly 21/7 so no news is good news for me.(The lower pgm prices at this stage should help the employers' case).At the end of the day above inflation pay rises as witnessed previously in this industry cannot sustain the viability of these miners.Increasing productivity and slashing costs can only go so far,the 6.5% inflation rate in S.Africa when there is deflation and falling prices in the developed world,means that unless pgm prices and demand keep rising to keep pace,these businesses are moribund.I believe some consolidation is needed in this space.Being brutally honest i have positions in both Lonmin and Anglo,the third and first biggest players in this space.I believe the deposits in SA ( where 80% of the total world deposits exist) are too valuable to be left in the ground and there will always be pgm demand i think.If one of the three big players fail in SA then pgm supply will be curtailed, and prices will rise with the added demand for what is mined.I have heard that private equity may purchase a failed Lonmin,but the PIC wouldn't want this,plus why would private equity succeed where so many others have failed.We are in limbo now waiting for the Fed decision on US interest rates at their September meeting 20-21/9.A quarter percent interest rate rise will strengthen the dollar and lower gold and platinum prices.This is the theory,but the Fed raised rates last December and gold and platinum prices haven't done too badly this year, so i'm relaxed about it.However, be it increased industrial/jewellery demand or a lower dollar index,we need pgm prices up for Lonmin's confidence and viability.I cannot offer any more thoughts,i live in hope that the wage negotiations end in a sensible outcome.This would be the biggest vote of confidence for Lonmin and mean the workforce want to work with management to save the situation.Half a loaf is better than no loaf at all.It certainly isn't boring being a Lonmin investor,and the rewards have been good,but this gyration in the share price is fraying the nerves now!!!!!

[careful] 31/8/2016 12:40

That LMI should require further funding within months of a huge rights issue and supposed increased credit facilities is not good news.
where has all of the cash gone?

[cudmore] 31/8/2016 12:32

Topped up on this dip today then on to £2.50

[tallrugbyguy] 26/8/2016 16:06

Looking good today after a few down days!

[cudmore] 26/8/2016 14:54

Could see a rally back northwards here!!!

[cudmore] 18/8/2016 14:16

Can't believe these aren't flying northwards with today's RNS

[redbaron10] 17/8/2016 14:14

Fourth anniversary of the Marikana massacre yesterday so an understandable subdued dealing in Lmi shares.Global diesel engine market to grow 8.65% by 2020.

[harry_david] 16/8/2016 09:03

Good point RB and it may be reason for current strength. With the recent price fall in pgm's and currency strength of rand it could also be informed buying for a bid. The talk is certainly there.

[redbaron10] 16/8/2016 08:45

Despite the low trading volumes,if we can hover around 240-250p then Lonmin should get promoted from the ftse small cap to the ftse 250

[cudmore] 14/8/2016 21:28

Will see this cross £2.50 this week then we'll see the brokers who advised to sell revaluing their share price targets.

[harry_david] 14/8/2016 16:17

Lonmin has to be a target of one of the big two if this type of thinking is being pursued.

[redbaron10] 14/8/2016 10:11

Interesting article on the front page of the Sunday Times business section 'Anglo American pressed to break up £12bn empire'.The PIC in South Africa has been stake building in AAL and by the sounds of it intends to become an active investor in creating 'a national resources champion'.Apparently they wish a break-up of the planned three main divisions going forward of PGMs mining,copper and diamonds.The wish is for the platinum sector to be a stand alone entity.Doesn't sound to me that interest in the pgms sector is waning.Bit of a shake-up all round is probably not a bad thing.

[harry_david] 11/8/2016 20:10

Saw it in one of SA banking sites, Fastmetals? Did not mention the company, just aminer, also some talk of settling electricity union conflict. No idea how reliable they are but pricing action since suggests something. Sorry not to be more specific, just skimmd and thought common knowledge. Will look further

[redbaron10] 11/8/2016 20:02

harry_david haven't picked up on this news.Can i ask where you got it? Been trawling through articles but not seen anything.I would be much obliged.cheers

[harry_david] 11/8/2016 18:26

Strike threat settled so pgm's then fall in price. On balance presumably good news for Lonmin.

[redbaron10] 11/8/2016 17:26

Not sure at these trade volumes if there's enough momentum.I'm looking at Putin and the Ukraine.Nothing but a few rumbles at the mo,but if it escalates,oil,and precious metals will spike.I don't like profiting from some news stories,but business is business and i'm here to make money at the end of the day.Added some more Hochschild cos of the Ukraine situation plus their interims are on 16/8.Not a fan of August trading,especially when i'm buying what is now expensive stock,but i talked myself into it!

[cudmore] 11/8/2016 14:57

This is ready for a breakout to £2.50