Lonmin EPS up 63 percent

By Eric Onstad

LONDON (Reuters) - Lonmin, the world's third biggest platinum producer, posted a 63 percent jump in first-half profit on strong platinum prices, but withdrew a long-term output target due to South African power problems.

The company (LMI.L), listed in London and with operations in South Africa, had been aiming to boost output to 1.2 million ounces by 2012 by building new mines, but said on Thursday this was now in doubt, Chief Executive Brad Mills said.

"The 1.2 million ounce target previously published was dependent on the function of power availability for all of our growth projects," he told a conference call.

"Until we actually see what (utility) Eskom is committed to delivering, we are not confirming that guidance," he said, adding the firm would update its long-term target when it presents full-year results. Output in the 2007 fiscal year fell by 16 percent to 793,584 ounces.

Lonmin said EPS, excluding movements in the value of a convertible bond, rose to 132.5 cents for the six months to end March from 81.5 cents in the same period a year ago. The EPS figures were largely in line with expectations, analysts said.

"Overall a reasonable set of results, although cost inflation continues to be an issue. This, however, is clearly more than offset by current strong metal pricing, which looks set to stay," Cazenove said in a research note.

Lonmin shares, which have underperformed the UK mining index .FTNMX1770 by 13 percent so far this year, were up 1.2 percent at 3,251 pence at 9:33 a.m., while the index was up 0.8 percent.

ROBUST PLATINUM PRICES