Lonmin CEO has serious illness

Platinum miner Lonmin said its Chief Executive Officer (CEO), Ian Farmer, is in hospital after being diagnosed with a serious illness.

Lonmin's Chairman Roger Phillimore has assumed control for the time being of Lonmin's Executive Committee (Exco), which has been augmented by Lonmin director Mohamed Seedat who, until 2010, was the Chief Operating Officer of Lonmin.

Farmer became CEO of Lonmin in September 2008 and has been with the company since 1986.

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Earlier in the day Lonmin said it has instructed the striking workers at its West Marikana operations in South Africa to return to work by Friday August 17th or face the sack.

Violent clashes at the mine have resulted in the deaths of eight Lonmin workers and two policemen and the interruption to mining means Lonmin is unlikely to meet its full-year guidance of 750,000 saleable ounces of platinum. Furthermore, Lonmin added that unit costs will be negatively affected by the interruption, making it probable that the unit costs will rise by more than 8.5% previously indicated.

The company continues to monitor the position closely regarding the additional pressure which the current disruption to production may put on its bank debt covenants when they are next tested on September 30th. Less than a month ago Lonmin said net debt remains well within the limits of its existing bank debt facilities.

The shares were trading at 654p an hour before the close, down 41p on the day.

JH