Lonmin Share Discussion Threads

[dealy] 10/4/2015 15:45

looks like it's crawling its way back.

those electricity problems shouldn't be insurmountable.

[lazyhisnibs] 08/4/2015 20:03

Eskom again locked-out from the relatively large Medupi power plant soon to be commissioned construction company personnel I think on the basis that their management and some of their workers need to resolve things first. This plant needs to get commissioned without much more delay which has been extensive to put it mildly. Commissioning more-or-less to schedule has become critical as far as I can determine. Eskom appears to be trying to remain at arms length whereas the union is loath to let them do that.

hxxp://citizen.co.za/358342/eskom-confirms-medupi-lockout/



The article below is about the largest of the new power stations being built as referred to above.

hxxp://www.eskom.co.za/Whatweredoing/NewBuild/MedupiPowerStation/Pages/Medupi_Power_Station_Project.aspx



The article below is wider scope wiki contribution about Eskom's role.




The next one is about the on going power cuts (called load shedding) which so far haven't been as bad as anticipated bar for he first month. The load shedding was meant to facilitate ongoing and extensive maintenance of partially neglected plant and equipment. (I.e Eskom's that is not Lonmin's.)

hxxp://www.iol.co.za/business/opinion/sa-s-power-crunch-risks-rating-1.1842065#.VSV2X5WJjIU


I am not presently holding although I did and that cost me a fair whack. I'm not convinced that even the best mining management team in the world (who ever they might be) could handle this hot potato well. That also goes for the other two big beasts on the platinum belt.

[buywell2] 04/4/2015 15:21

The Skipper 7 Aug'14 - 19:22 - 1479 of 1647 0 0

With a double bottom on the chart and the price of platinum now out performing gold this has the makings of a great recovery play imo. The one year chart for the metal now has a clear price channel here: and will look even better when updated to take account of the current price of $1473 an ounce.

Opened position with 2000 shares today and will add as the recovery gathers momentum.

The Skipper 8 Aug'14 - 16:53 - 1480 of 1647 0 0

Movement pretty much as expected today, with a strong finish, so I added another 1500. Should test 240 early next week imo, maybe meet a little resistance just above that and then rock on from there provided price of platinum holds up.

Good luck all

buywell2 8 Aug'14 - 17:06 - 1481 of 1647 0 0 edit

Chart has just put in a double bottom

But it ain't out of the woods yet

[justthemoney] 03/4/2015 21:45

Thanks for your shares.

[lazyhisnibs] 01/4/2015 20:43

Mining Analyst Video (Peter Major of Cadiz)

The Mining Charter (implementation angle mostly)
- The court's involvement
- He talks about Lonmin with some frustration "why kill a company like Lonmin which employs 40000 people on ideology?" he asks.

hxxp://www.businessdaytv.co.za/shows/newsleader/2015/03/31/govt.-business-at-loggerheads-on-ownership

(If the link doesn't work just copy paste the link in to your browser.)

Note: another analyst was positive about the minister getting a court involved which suits the mining companies too by the sounds of it.


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Electricity went up in SA today and Eskom is asking the regulator for permission for it to increase the tariff by a total of 25% this year to compensate for under-recovery last year.

Note: I haven't yet researched if Eskom has contracts with the largest industrial users but I think I read somewhere that it did. It certainly does with BHP with regards to the smelter.

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Fuel prices also went up mostly due to the Government grabbing 70% of the impact of the drop in oil prices back from motorists.

[lazyhisnibs] 31/3/2015 19:18

The Mining Charter dros1 mentioned.

Some argy-bargy about how it is implemented. There should be more articles around if not this evening then tomorrow but I think the official is going to ask the court to address certain matters. For instance what happens if a company signs up the requisite 26% but that shareholding later drops because of part or totally selling out of the black empowerment component. Must the company replace that portion sold.

hxxp://www.iol.co.za/business/features/mining/transformation-slow-in-mining-sector-1.1839618#.VRrm7JWJjIU


hxxp://www.bdlive.co.za/business/mining/2015/03/31/department-of-mineral-resources-at-loggerheads-with-mining-industry

[lazyhisnibs] 30/3/2015 16:28

Using the above link for platinum from high to low the fall over five years was 43% and the low is less than twenty dollars away.

According to Google's data from Lonmin's five year high to low the fall was 95% and again the low is nigh.

So, twice the rate of decline which, if thinking about going long other than for range trading begs the questions; what is likely to push platinum up in the next few months and what could change in SA substantially for the better?

Stuff that is happening in SA:

Electrical supply challenges - technical and political

Industrial relations - the local press is full of stuff about this and the international media covers it a lot too and impacts more diverse than just Lonmin's mines

The mining act is still being reviewed and the first draft was pretty horrible for capital

Black empowerment provisions

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SA and beyond

Platinum - how much is above ground

Macro economics - China still slowing; Europe still in the doldrums and none of the other major economies or regions shooting the lights out. However, the European car sales figures I saw recently looked pretty good considering. Could that be the trigger for platinum?

GLEN management in May to seek approval to give its share holders the nigh on 24% that company holds in Lonmin shares


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Other:

Petrol engines use palladium

Diesel engines which is mostly Europe for platinum

Recycling

[careful] 30/3/2015 13:33

good information dros.
to meet the black ownership rule, glen should place their 23.9% stake.
problem solved.

is that what this is all about?
a perfect storm, but then that shows in the share price.

[lazyhisnibs] 30/3/2015 12:12

"but lmi platinum workers are now well paid."

Limited to what SA workers earn in other sectors I agree but try emailing AMCU or the leading lights within the ANC / Casatu / Communist party of SA alliance and argue that but you miss the point. If there was a strike at the monopolistic power supplier that might give the supply side a temporary breather but it wouldn't do anything for production targets as the grid is on the edge already.

Also consider the gap between platinum and palladium. Platinum costs 50% more and then there is recycling.

Out of interest how far would the platinum price need to fall for you to consider it a collapse? And what would be the benchmarks, 25% below that of gold with very limited use beyond jewellery or the gap between the aforementioned closing to say a quarter?

[careful] 30/3/2015 12:00

£2.2bn of assets on the balance sheet last year after write-downs.
we all know that mining assets are open to interpretation, but to value the company at £703m, just 31% of last years asset value is extreme.

but what am i waffling on about, it is just short term high frequency momentum traders scaring the sh*t out of everyone.
they even got tesco down to 160p recently.

[careful] 30/3/2015 11:48

but lmi platinum workers are now well paid.
they will not wish to lose that income.
they can feed their families and have a huge interest in the company succeeding.
lmi is now very well managed.

i am more optimistic, and the platinum price has fallen but not collapsed.
demand has held up quite well.

consolidation of the industry may well happen in the future.
platinum is a very important metal.

[lazyhisnibs] 30/3/2015 11:42

"Is that justifiable?"

"yes" says a George of few words.

Well, after I lost money on this I heard at the TV link I provided above that there was rumour that the big three had been buying platinum during the strike. Whether this stuff is true or not other things I've read or heard (mostly soundbite stuff) suggests there is still a lot above ground.

Then there is the internal SA stuff. For instance some damage was done to the largest of new power stations being built by construction workers last week. On Friday I think it was, 1000 workers were fired. Eskom says it's the contractor's business, the union that is sometimes described as militant appears to hold Eskom responsible.

The platinum price is still rock bottom and the trend down.

That's a long version of yes.

[careful] 30/3/2015 11:40

The annual results are out in May.
Then the picture will be clearer.

I held Kaz which was similarly shorted up to the results.
It then bounced about 50% within weeks.

Similarly EVR I baled out of.
It eventually collapsed to about 50p.
It has since more than tripled over a few months.

We make the mistake sometimes of thinking 'the market knows something'.

[careful] 30/3/2015 11:33

I have just checked the numbers.
LMI are 60% down in 12 months.
and 90% down from 3 years ago.

[dealy] 30/3/2015 10:21

apart from companies with balance sheet problems this has got to be one of the worst performing stocks in the world over the past 52 weeks. Is that justifiable?

[dealy] 30/3/2015 10:16

there seems to be a complete lack of interest in the small/mid cap sector in the UK right now. I have a bunch of stocks that are trading at all time lows. Volumes are also very low. In some cases it's worse than the peak of the financial crisis.

i am hoping that either M&A or rotation by funds leads to a better Q2.

[careful] 29/3/2015 12:37

last year LMI produced 442,000 oz of platinum because of strikes.
this year they are on course to produce 750,000 oz at reduced prices.
they are reducing cap ex, and debt is low.
glen offloading their 23.9% stake, trivial for them, muddles matters.
all things considered I am amazed that LMI are so lowly valued.

[careful] 27/3/2015 09:26

shares are strange assets.
if just 3% of all share-holders decided to sell one Monday morning,
it would cause a crash.

[careful] 27/3/2015 08:53

down about 5% on only 250,000 shares traded.
out of 580m.

[dealy] 27/3/2015 08:47

This stock makes me cry. Down 8% in 24 hours.