Lonmin aims for 850,000 oz output by 2013

By Eric Onstad

LONDON (Reuters) - Lonmin Plc (LMI.L), the world's third biggest platinum producer, swung to an annual loss on weak prices and lower output, but said it planned to boost output by a fifth by 2013 as prices climb on shortages.

Its shares gained as the company said it aimed for refined platinum production to rise gradually to 850,000 ounces by 2013 from 700,000 ounces in the current financial year to end September to meet a supply deficit.

"We're working on the basis that we'll see a gradual recovery during 2010, with supply shortages expected from 2011 onwards," Chief Executive Ian Farmer told Reuters on Monday.

"I think we'll see a gradual firming of the revenue basket (in 2010), and that may come through as a slight firming of prices and that also may come from a slight weakening of the exchange rate." Lonmin shares in London, which have rebounded by nearly 90 percent this year on a recovery in platinum prices, jumped 6 percent to 1,687 pence by 9:15 a.m., outperforming a 3.6 percent rise in the UK mining index as metals prices rallied.

The group, whose mines are located in South Africa, said it would not pay a final dividend.

"Lonmin remains exposed to still potentially weak markets, the strength of the rand and cost increases ... Against this backdrop, and given the strong lead given by the passing of the dividend, we retain our (sell) stance," said analyst Charles Kernot at Evolution Securities.

PAYS OUT ON GUARANTEES

Lonmin, listed in London and Johannesburg, posted an underlying loss per share of 59 cents for the fiscal year, compared with earnings per share of 336 cents last year.