LONDON, July 26 (Reuters) - Lonmin, battling turbulence in the platinum sector, has slashed its spending plans and decided to hold back efforts to ramp up key shafts, warning a period of poor demand and weak prices could persist for longer than it had previously expected.
The miner has cut 2012 spending by $20 million to $430 million and has slashed capital spend for its 2013 and 2014 financial years to just $250 million, deferring spending on its key Hossy, K4 and Saffy shafts. It had hoped to ramp up those growth shafts swiftly, to bring down the overall cost of producing an ounce of metal.
Lonmin's capital expenditure blueprint had included $450 million a year until 2015 to boost production to 950,000 ounces a year, from 750,000 targeted for 2012.
The miner, which saw third-quarter platinum sales dip just over 6 percent, said it was keeping its 2012 sales target but said its 2013 target would now be flat at 750,000 platinum ounces.
Lonmin, which analysts say has one of the weaker balance sheets in the troubled industry, said it could also tap debt markets, adding it had embarked on a "thorough review of our growth strategy, future production profile and consequent capital investment programme".
"This review is ongoing and we are examining all cash conservation and cost-saving measures available to us," it said.
Lonmin saw pretax profit tumble in the first half, as miners across the South African platinum sector grapple with rising costs, weak European demand that weighed on prices, government-imposed safety stoppages and militant unions.
Anglo American Platinum, the world's largest platinum producer, said earlier this week that earnings fell almost 80 percent in the six months to the end of June. The miner replaced its chief executive last week.