Lonmin mulls $1billion rights issue backed by Xstrata: paper

LONDON Sat Aug 18, 2012 5:42pm EDT

Striking miners march after they were addressed by former African National Congress Youth League (ANCYL) President Julius Malema outside a South African mine in Rustenburg, 100 km (62 miles) northwest of Johannesburg August 18, 2012. The bloody protest by South African miners that ended in a hail of police gunfire and 34 deaths this week could also wound the ruling ANC and its main labour ally, laying bare workers' anger over enduring inequalities in Africa's biggest economy. Thursday's shooting, bringing back memories of apartheid-era violence, underlined that after 18 years in power the African National Congress and its union partner have not been able to heal the fissures of income disparity, poverty and joblessness scarring the country. REUTERS/Siphiwe Sibeko

Striking miners march after they were addressed by former African National Congress Youth League (ANCYL) President Julius Malema outside a South African mine in Rustenburg, 100 km (62 miles) northwest of Johannesburg August 18, 2012. The bloody protest by South African miners that ended in a hail of police gunfire and 34 deaths this week could also wound the ruling ANC and its main labour ally, laying bare workers' anger over enduring inequalities in Africa's biggest economy. Thursday's shooting, bringing back memories of apartheid-era violence, underlined that after 18 years in power the African National Congress and its union partner have not been able to heal the fissures of income disparity, poverty and joblessness scarring the country.

Credit: Reuters/Siphiwe Sibeko

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LONDON (Reuters) - Platinum miner Lonmin (LMI.L) is considering a $1 billion rights issue starting as early as next month to recoup losses following the closure of its Marikana mine in South Africa where 34 workers were killed, the Sunday Times reported.

Lonmin shareholder Xstrata XTA.L had signaled it was willing to cover its part of the fundraising, the newspaper said, citing sources close to the situation.

Lonmin was likely to ask for leniency in loan repayments from its bank and reduce its spending to deal with spiraling debt before the end of its financial year next month, the paper added.

The London-listed company was forced to stop operations at its biggest mine this week after South African police opened fire on striking miners armed with machetes and sticks on Friday.

It was Africa's bloodiest security operation since the end of apartheid.

The company is also under pressure from falling platinum prices due to a collapse in demand from European carmakers.

(Reporting by Karolin Schaps; Editing by Andrew Heavens)

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