Rebuffed Xstrata set to make new bid for Lonmin

Strikes at Lonmin’s Marikana mine in South Africa pushed it to a $698m loss

Xstrata is preparing to renew its bid for Lonmin after the beleaguered South African platinum miner revealed it had rejected a takeover approach from the FTSE 100 mining giant.

Xstrata, which is Lonmin's biggest shareholder with a 25 per cent stake, began rallying support from fellow investors yesterday after the FTSE 250 miner made its offer public. It said Lonmin dismissed its approach without "substantive engagement" with shareholders, and is understood to be lobbying investors to gauge their support for it to make a new offer.

Xstrata did not comment on the prospect of another – possibly hostile – approach for Lonmin. But a spokesman said: "We believe our concerns are shared by other major Lonmin shareholders. We remain open to all constructive solutions to strengthen Lonmin's management and operational capabilities to ensure that the business returns to profitability. We are concerned the business does not have the management capabilities to ensure a sustainable future."

Last month, Xstrata tabled a "reverse takeover" bid to inject its platinum and alloys division into Lonmin in return for a 70 per cent stake in the resulting entity, in a deal that was conditional on the South African miner changing its top management team.

Lonmin defended its board yesterday and suggested that the approach was an attempt to take control of the company on the cheap. However, Xstrata is understood to believe it can secure enough support from other shareholders to force Lonmin to reconsider. Xstrata is keen to drive through its reverse takeover deal, but sources cautioned that an offer was by no means certain and it could make an alternative proposal.

The group is also thought to be discussing less drastic alternatives, such as changes to Lonmin's management and striking a deal to provide it with management services.

Meanwhile Lonmin announced that recent strikes at its Marikana mine in South Africa had pushed it to a $698m (£439m) loss for the year to September.

The miner also said it would price its long-awaited $817m rights issue at a hefty 45 per cent discount. Xstrata would not say whether it will back the cash call.