Lonmin Plc: SWOT Analysis & Company Profile by BusinessReview

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									Lonmin Plc

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Lonmin Plc: SWOT Analysis & Company
Profile


Reference code: BRMM024CP10-Q4

Published: Dec 2010




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Lonmin Plc - SWOT Profile                                                           Page 1
Lonmin Plc

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Lonmin Plc - Company Overview

Lonmin Plc (Lonmin) is one of the leading producers of platinum in the world. It is engaged in mining, refining and
marketing of platinum group metals (PGM), which includes rhodium, ruthenium, platinum, palladium and iridium as well as
gold, nickel, and copper ores. The company has vertically integrated operational structure that ranges from mining to
marketing of platinum and other group metals. The company operates in three reportable business segments namely the
Platinum Group Metals (PGM) Operations segment, the Evaluation segment and the Exploration segment. Its mining
operations are located in the Bushveld complex in South Africa. The company’s operations are spanned across the
Americas, Asia, Europe, and South Africa. Lonmin is headquartered in London, the UK.


Financial Performance

The company reported revenues of (U.S. Dollars) USD 1,585.00 million during the fiscal year ended September 2010
(fiscal year 2010). Its revenues recorded a declining compound annual rate of 15.71%, during the period, 2008-2010, and
year-on-year (Y-o-Y) growth of 49.25% over the fiscal year 2009. During the fiscal year 2010, its operating margin was
14.57% as against an operating margin of -23.92% during the fiscal year 2009. Moreover, during the fiscal year 2010, the
company’s net profit margin was 7.07% as against a net profit margin of -26.84% during the fiscal year 2009.




Lonmin Plc - Key Facts

Lonmin Plc, Key Facts

                                  4 Grosvenor Place, London, ,
                                                                    Ticker Symbol, Stock       LMI (London Stock Exchange
Corporate Address:
                                  SW1X 7YL, United Kingdom          Exchange                   (LON))



Telephone                         + 44 20 72016000                  No. of Employees           22,000



Fax                               + 44 20 72016100                  Financial Year End         September



URL                               www.lonmin.com                    Revenue (in USD Million)   1,585.00



Industry                          Metals and Mining



Locations                         United Kingdom, South Africa

Source: Annual Report, Company Website, Primary and Secondary Research




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Lonmin Plc - SWOT Profile                                                                                           Page 2
Lonmin Plc

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Lonmin Plc - Business Description

Lonmin Plc (Lonmin) is the third largest platinum producer in the world. It is principally engaged in the discovery,
acquisition, development, and marketing of minerals and metals in South Africa. The company is focused on mining,
refining and marketing of platinum group metals (PGM), which includes rhodium, ruthenium, platinum, palladium and
iridium as well as well as gold, nickel, and copper ores. For the year ended September 30, 2010, the company produced
694,376 ounces of Platinum in concentrate and sold 706,274 ounces of Platinum. As of September 2010, the company
had 23,915 employees.

The company’s operational structure is vertically integrated that ranges from mine to market. Its operational divisions
include Mining and Process Division. Its Mining division extracts ore. The Mining operations of the company are located in
the Bushveld complex in South Africa. It has two mining operations, including Marikana mining and Limpopo mine. Its
Marikana mining is based on the Western Limb of the Bushveld that contribute about 92% towards the company’s annual
production. Its Limpopo mine is based on the Bushveld’s Eastern Limb. The company through its two mining operations
engages in mining the Upper Group 2 (UG2) and Merensky PGM-bearing reefs. Lonmin through its process division
engaged in converting the ore into refined PGMs. In addition, the company’s Shared Services functions offer steady levels
of support and infrastructure across the operations.

Lonmin’s business activities are organized into three reportable segments namely, the Platinum Group Metals (PGM)
Operations segment, the Evaluation segment and the Exploration segment. The company through its PGM operating
segment engages in mining and processing of PGMs, along with associated base metals in South Africa. Its operational
mines and processing facilities are located in South Africa. The Evaluation segment engages in the evaluation projects
through pre-feasibility of the economic viability of newly discovered PGM deposits. Its all evaluation projects are located in
South Africa. The company through its Exploration segment engages in the discovery or identification of new PGM
deposits. The segment includes the costs of exploration projects. These exploration projects have the objective of
identifying PGM deposits, can be commercially realized and, can occur anywhere in the world.

Geographically, its operations are spanned across The Americas, Asia, Europe and South Africa. During the fiscal year
ended September 30, 2010, the company generated 28.6% of its revenue from the Americas region, followed by Asia
(23.5%), Europe (33.4%) and South Africa (14.5%).

Recently, Aviva Corporation Limited signed joint venture agreement with Lonmin Plc's subsidiary, AfriOre International
(Barbados) Limited.




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Lonmin Plc - SWOT Profile                                                                                            Page 3
Lonmin Plc

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Lonmin Plc - Major Products and Services

Lonmin Plc is a United Kingdom-based company. It is engaged in the production of platinum and platinum group metals
(PGMs). The company's key products include the following:

Lonmin Plc, Major Products and Services
Products:

Iridium

Palladium

Platinum

Rhodium

Ruthenium

Gold

Nickel

Copper
Source: Annual Report, Company Website, Primary and Secondary Research




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Lonmin Plc - SWOT Profile                                                                                     Page 4
Lonmin Plc

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Lonmin Plc - History

Lonmin Plc, History

    Year                Event type                                                  Description


                                                The company completed a two years wage agreement with the National Union of Mine
   2009      Contracts/Agreements
                                                Workers in respect of its marikana operations.


                                          The company declared the extension of a known zone (9400 Zone) and discovery of a
   2007      Corporate Changes/Expansions new narrow sub parallel zone (Upper Breccia Zone) of significant low sulphate high
                                          PGM.


                                                The company acquired a 22% stake in Platmin, mineral exploration company for $85
   2006      Corporate Changes/Expansions
                                                million.


                                                The company restructured the Sudbury Camp Joint Venture in an amendment
   2006      Contracts/Agreements
                                                agreement with Wallbridge Mining Company.


                                                The company acquired the Limpopo mine located in the Northern side of the Eastern
   2005      Acquisitions/Mergers/Takeovers
                                                limb of the Bushveld complex in Limpopo province.


   2005      Acquisitions/Mergers/Takeovers Acquired Southern Platinum, a Canada based company.


                                                The company signed a joint venture agreement with Gold stream mining, a company
   2004      Contracts/Agreements
                                                incorporated in Australia.


                                                Lonmin entered into a joint venture agreement with Freegold Ventures, Pacific North
                                                West Capital Corp (PFN) and Freegold Recovery US to discover the Union Bay
   2003      Contracts/Agreements
                                                property in South East Alaska for platinum group metals and associated metals and
                                                minerals.


                                                The company entered into a joint venture with Boynton Investments to explore for
   2002      Contracts/Agreements
                                                PGMs on fow farms near the Loskop Dam in the Eastern Bushveld.


                                                The company entered into a share subscription agreement with Plat
								
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