* Says total tonnes mined relatively flat
* Platinum sales up 16.7 pct at 108,342 ounces
* On track to hit sales target of 660,000 ounces
* Chairman says firm taking lead in employee relations
* Shares up more than 12 percent
LONDON, Jan 31 South African miner Lonmin has started to put a troubled year behind it, saying production in the last three months of 2012 bounced back more strongly than expected from crippling strikes earlier in the year.
The world's third-largest platinum producer said on Thursday its performance in the quarter "substantially exceeded" its planned ramp-up in output after strikes and violence paralysed its Marikana mine for six weeks from mid-August.
The company also stuck to its targets for sales, costs and capital spending for its financial year ending September 2013.
Lonmin shares surged more than 12 percent after losing almost half their value in 2012.
The mine was at the centre of a wave of labour unrest and violence in South Africa's mining industry that left dozens dead.
The wildcat stoppages at Marikana, scene of South Africa's most violent episode since the end of apartheid, added to the troubles facing the country's platinum industry, which have also included weak demand and cost pressures.
Chairman Roger Phillimore told the company's annual shareholders' meeting that Lonmin would work to rebuild trust with its miners and unions.
"The mining industry in South Africa is at a cross roads," he said at the meeting in central London. "It is imperative that Lonmin does its part to contribute to improved relations with its employees both inside and outside the workplace."
He said changes couldn't be made without the support of government, union and employees, but Lonmin was taking the lead in areas such as employee relations, use of local labour, and improving housing and accommodation.
The company had made progress in restoring production, he said, but it would take time for the impact on the company's 28,000 employees to fade. "We are still operating in a tense industrial relations climate," he said, addressing about 40 shareholders in an oak-panelled room.
The causes of the strike were complex, he said, and factors such as inter-union rivalry and political agendas played a part as well as the less-than-ideal employment conditions.
"The key thing not to forget in this is, I believe, this company played no part in the deaths of 44 people." he said.
Platinum, used in catalytic converters in cars, has come under pressure during the global economic downturn and from the slump in car demand, particularly in Europe.
The strikes, weak platinum prices and high costs meant Lonmin had one of the most stretched balance sheets in the platinum sector. It was forced to turn to investors in November to raise $817 million to avoid breaching lending terms.
Lonmin said last year it had lost 110,000 ounces of production and scaled back long-term plans to boost output and sales. Meanwhile rival producer Anglo American said on Friday its quarterly production figures had been badly dented by the strikes.
Lonmin's trading update offered investors some reassurance.
"The results were quite significantly ahead of where I'd expected them to be," said Panmure analyst Alison Turner.
"They had a very, very bad year last year on a number of fronts but they've now got the balance sheet addressed and operationally they seem to be doing very well, that underpins what is happening in the share price," she added.
Lonmin aims to sell 660,000 ounces in the financial year to the end of September 2013. But Turner said this could be on the conservative side: "There's potential for upside."
Lonmin opened an official search for a new chief executive at the end of last year after Ian Farmer, who is being treated for a serious illness, officially stepped aside.
At the annual meeting, 29 percent of shareholders voted against a proposed pay package for the company's directors.
The remuneration of executives, including a significant retention award payment to the chief financial officer, serving as interim CEO, were deemed insensitive by some pressure groups in light of the labour relation problems last year, according to PIRC, one of Britain's leading shareholder advisory groups.
Lonmin said quarterly platinum sales rose 16.7 percent to 108,342 ounces while total platinum group metals (PGM) sales fell 3.7 percent to 182,576 ounces. The average price it received for platinum rose 3.5 percent to $1,176 per ounce.
Spot platinum prices are on track for their biggest monthly rise in a year, outperforming other precious metals like gold and silver as an increasingly optimistic view of the global economy favours industrial metals. But they remain more than 25 percent below their 2008 peak.