Lonmin Share Discussion Threads

[lazyhisnibs] 09/7/2015 15:59

That sums it up almost too well.

[careful] 09/7/2015 15:15

over £2bn of assets mean nothing if the company makes losses.
some rationalisation is a certainty.
but this company is run for the benefit of the employees not the shareholders.

[lazyhisnibs] 08/7/2015 17:07

With platinum likely to fall through $1000 within a week or so and head off down in a $800 direction then whether it gets there or not either one or more of the big three are going to have to raise money sooner or later (again in Lonmin' case) or do something major on the restructuring front. I think that would involve a long negotiation process with the union/s culminating in miners getting way better severance packages than ever before in SA.

None of the three have been profitable for sometime according to analysts on that site.

If memory serves Impala Platinum have two new shafts coming on line soon (ish) and one refurbished shaft. I can't remember how they are handling that from a staffing point of view but it was (somewhat confusingly) covered in the media a few months back.

I've had it with falling knives in the resources sector. I'll look at cash in bank etc when it finally stops falling but it does have that temporarily undervalued (if risky) feel about it. I'm surprised a holder hasn't started a new thread given the title of this one.

[dealy] 08/7/2015 10:01

£580m market cap. such carnage in the markets. hopefully this is the bottom

[dealy] 07/7/2015 23:40

Mining and O&G crash in London and NY yesterday. Massive drops in everything. Looks like a hedge fund being liquidated if you ask me. October 1987 stuff in the resource sector today. Some stocks in the US bounced 20% from their intra day low. So hopefully big bounce tomorrow.

Horrible last few days.

[lazyhisnibs] 06/7/2015 00:55

The following may not be the last thing out of China to turn the Composite back up:-



PS: re the strike referred to in the previous post a compromise may be found that turns out to be part of the way forward for SA's mining industrial relations. Basically the workers would get a much better severance deal. (I wish executives would get a lot less than they do when they are pushed, it would often seem, for inadequate achievement.)

[dealy] 03/7/2015 08:36

like last time it fell down to this level the drop has occured on light volume. no news from Capita were adding up until 2 weeks ago. today's volume particularly light.

[audigger] 02/7/2015 20:16

Well I bought these two weeks ago thinking it was the bottom. Clearly I was wrong! Will be adding some more next week so watch out that'll trigger another fall in to the 90s!

[lazyhisnibs] 01/7/2015 16:57

Supply is more likely to increase but through one or both of the other two majors on the belt. Impala Platinum sounds like the most likely source of extra supply. DYOR on that as it's according to memory and the commentators didn't seem that sure either.

Any kind of rationalising is a political and HR hot potato if workers are involved. More so than in other countries?

For example, in the media yesterday:-

Vodacom (Vodaphone in the UK has a large holding) is (or is trying) to buyout Neotel in SA. Yesterday there was something in the media about them getting the go-ahead subject to this that and the other thing. Included were no staff layoffs/redundancies at the target if as a direct consequence of the buyout. Also, R1.4 billion extra needed for the BEE requirements presumably in terms of existing law.

As I understand it the competition-type regulator stipulated all of this on a take it or leave it basis. Even if there is a practical appeal process the point is shedding workers from the industry on a scale that would lower production enough to make a real difference to supply would be a nightmare for the miners there. It might not be a practical aim any time soon. A moral one?

[careful] 01/7/2015 13:32

trading volumes are still very light.
never understand how these prices are calculated.
huge falls on very light volume.

[careful] 01/7/2015 13:31

still in free fall.
I suppose the main risk here is whether lmi will ever be allowed to run as a profitable independent company.
they are taking the blame for everything and the government, police and armed striking miners seem to get off lightly.

I am still smarting from what the American legal system did and are doing to BP.

[dealy] 01/7/2015 13:11

thanks for your input careful.

I reckon it's time for some industry consolidation if the metal price is so bad. time to take consolidation and take out supply

[careful] 01/7/2015 12:59

to think i sold out here in may 2013 at 275p.
going back further I sold out at 613p aug 2012.
the high of January 2011 2000p will never be seen again.
although the market cap of £640m is well below net assets of £2.2 bn.

[careful] 01/7/2015 12:46

It will take time to recover from the disaster of Aug 2012.
Many armed striking miners were shot dead, others injured.
Lonmin did not come out of it very well, although it seems to have been a badly run police operation.

Holding in here.Production looks better, present all African management seems competent and trying to put past disasters behind it.
Trouble is there are many excuses to go short.

I bought a few more today,a high risk punt.

[dealy] 01/7/2015 11:15

stock has gone into free fall over the last 2 weeks. Wonder if Capita are still adding. Very painful once again.

[lazyhisnibs] 30/6/2015 21:20

Read across from Australian export data to the growth prospects for a couple of the world's largest economies? (See link for article below.)

If interested in resources stocks then the entire article might be worth a read.


hxxp://www.wsj.com/articles/australias-iron-ore-pain-deepens-1435649973


Extract

"Just three months ago, Prime Minister Tony Abbott’s government forecast that income from resource exports overall in the year ending June 30 would be down 8%, to 179 billion Australian dollars (US$137 billion). On Tuesday, it estimated earnings from exports of iron ore and other raw materials to China, Japan and elsewhere actually slid 11%, to A$174 billion."

[lazyhisnibs] 29/6/2015 17:37

The media is covering Nersa's (the regulator) decision not to approve a second tranche of electricity price increase as requested by Eskom the monopolistic power utility.

More electricity rationing is not an unlikely outcome but there are other options for the utility to raise some or all of their claimed funding short fall on the markets.

[lazyhisnibs] 29/6/2015 09:34

nash,

Please tell us a paragraph more about JLP. Junior/small cap? Exploration as well as production? Shaft that aren't deep with less need for cooling than the majors? High debt?

I just compared LMI and JLP in very simple terms on Google charts. Using all data, ten years and five years they shared similar decline paths. Then on the one year chart JLP diverged in a positive direction and of course LMI just got worse. Gradually they have been getting back in to synch .... downwards.

Thanks

[nash81] 26/6/2015 11:14

despite LMI is undervalued stated by analyst, share price is difficult to recover. better stick to other platinum, JLP has much better prospect to multibag then LMI. mining licence expected for the largest platinum mine in the world, and mcap only below 20m

[lazyhisnibs] 25/6/2015 18:18

careful

I'm looking on hxxp://www.businessdaytv.co.za/ now for stuff as I've not been able to get to the bottom of how much an impact electricity rationing is having on big industry. As for cost then there was video on there the other night that I cant find now whereby a company's (not platinum) proportion of operating cost attributable to electricity had risen from about six percent to nineteen. I can't remember if that was over three years or five. (Five probably.)

Despite getting my botty well and truly kicked in the first round I would certainly have another go in the nineties (perhaps a bit higher)unless I thought there might be another funding.

What follows in an article on the rise in electricity costs since 2008 to the beginning of this year so about 20% p.a. so far on average depending on start and end dates.

hxxp://mybroadband.co.za/news/energy/130116-electricity-prices-have-gone-up-300-since-2008-mines.html

[careful] 25/6/2015 16:06

after the recent generous concessions on wage levels,
i wonder how significant electricity prices are.
(as a % of cost per oz of platimum).

your detailed knowledge of electricity issues is appreciated lazyhisnibs,
but are they that important?

this share is being hammered.
market cap 713m small change in this industry.

[lazyhisnibs] 25/6/2015 15:53

According to the video link electricity is still relatively cheap in SA. However, it's rising fast and no longer is a significant magnet for big foreign industrial projects.

Early next week the relevant regulator will make a decision on the near-doubling of this year's electricity tariff rise as applied for by the power utility. Apparently it is needed to cover the cost of diesel as coal-fired power stations simply can't cope with demand. If approved there would still be similar levels of load shedding as exist now by the sounds of it. If not approved?


hxxp://www.businessdaytv.co.za/shows/editingallowed/2015/06/24/editing-allowed-part-1

(Paste the above link in to your browser if interested. This is part 1 with part 2 not being relevant.)

Does anyone know if most of Lonmin's shafts are deep? If not the rapidly rising cost of electricity could be argued to be less of an issue.

PS: The report about the killings at Marikana to be published the evening. There had been a court case to try to get the President to release it but I don't know if its release is due in anyway to that.

[lazyhisnibs] 23/6/2015 19:22

Is Lonmin burning through capital?

The platinum price keeps falling.

Costs keep rising especially labour at 10% p.a.? And electricity at very roughly 25%?

Limited scope to rationalise operations.

All that said it's not fallen to 110p or a tad lower again, yet.

[lazyhisnibs] 20/6/2015 18:43

"hxxp://citizen.co.za/405329/stage-3-load-shedding-to-be-more-frequent/

"“This is just to reduce the gap between Stage 2 and Stage 3,” Molefe said"

Well, the use for the word 'just' is, to put it politely, questionable as it also means that the load shedding schedule will allow for rationing of at least two hours UP TO 3 times a day more frequently. Whether Eskom turns off the power 3 times during stage 3 load shedding is another matter as they are far from consistent.

The number of localities caught up in all of this increases through the stages. Late this afternoon the rationing almost immediately went from stage 1 (which had been announced earlier in the afternoon) to stage 2 and by evening to stage 3. Eskom don't seem capable of sticking to stage 1 on most occasions. Once they start they almost invariably escalate quickly.