Lonmin agrees Limpopo deal

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The Independent Online

Lonmin, the world's third-largest platinum producer, has agreed to sell a controlling stake in its Limpopo Baobab mining division in South Africa for 1.1bn rand (£88.5m) to Shanduka, a black empowerment investment company.

The deal, which is subject to a feasibility study on the viability of Shanduka operating and developing the division, would see the investment firm buying 50 per cent plus one share of Lonmin's Messina Platinum subsidiary, which controls the Limpopo Baobab mine.

The transaction will allow Lonmin to develop its Limpopo Baobab mine, where operations were halted in 2009 after the global downturn sent the platinum price spiralling downwards. The platinum price has rebounded strongly this year. The deal with Shanduka would also help Lonmin to meet the black shareholding target of 26 per cent required by local legislation.