Struggling miner Lonmin shored up its finances with a $200 million (£153.1 million) boost from China on Monday as it awaits a rescue takeover by South African rival Sibanye-Stillwater.
Cash-strapped Lonmin has been the biggest casualty in South Africa’s platinum mining industry, which is under pressure from rising costs and weak prices.
In December last year Sibanye, which has been sweeping up a raft of palladium and platinum producers, said it would cut more than 13,000 jobs over three years to save money and cope with “lower for longer” platinum prices.
Today’s deal sees the firm strike a funding agreement with the Jiangxi Copper Company, giving Lonmin more liquidity on better terms than its existing debts while it awaits the close of Sibanye-Stillwater’s takeover.
The refinancing will not salvage jobs, however.
Chief executive Ben Magara said: “Regrettably, the new facilities do not address the fundamental business challenges facing Lonmin and do not offer an opportunity to avoid the announced retrenchments and shaft closures.”
Lonmin emerged in the Nineties after the split-up of Lonrho, a conglomerate run for three decades by buccaneering tycoon Tiny Rowland and once branded by then-prime minister Edward Heath as the “unacceptable face of capitalism”.
