LONDON – Shares in platinum miner Lonmin PLC fell as much as 8 percent Friday after it was revealed that South African police officers killed more than 30 striking miners at the company's platinum mine.
Since violence broke out last weekend at the Marikana mine, 60 miles (100 kms) west of Pretoria, shares have fallen by as much as 20 percent, at one time wiping some 390 million pounds ($610 million) off the company's market value.
Police chief Mangwashi Victoria Phiyega said 34 miners died and 78 others were wounded when police opened fire on strikers Thursday in one of the worst police shootings in South Africa since the apartheid regime ended in 1994.
Lonmin shares fell as low as 595 pence in early trading Friday before recovering by late morning to 640 pence, down nearly 2 percent. The company, the world's third-largest platinum miner, has also been hit by Thursday's announcement that Chief Executive Ian Farmer is hospitalized with a serious illness.
The company has estimated that it has lost 15,000 ounces of platinum equivalent in unprocessed ore because of the strike.
Platinum is mainly mined for the manufacture of catalytic converters, which are used to lower exhaust emissions in cars, but it is also used in jewelry, spark plugs and electrodes. The metal was trading at $1,433 a troy ounce on the open market Friday, up $39 on the day.
Lonmin warned Thursday that it was unlikely to meet its production targets for the year "although the extent of the variation from guidance will depend on the timing and speed with which normal operations can safely resume".
The company also said it expected unit costs to rise faster than planned as well.
"Provided that the strike can be resolved and the mine returned to full production within two weeks there should be no impact on longer-term forecasts," Alison Turner, analyst at Panmure Gordon & Co., said Friday.
"With downstream processing operations less affected by the strike and the company having built up significant inventories of metal in concentrate earlier in the year, we believe refined production could be slightly higher as the company runs down metal-in-process."