Xstrata drops bid for Lonmin, citing credit uncertainty

0 Comments | AFP, October, 2008

ZURICH (AFP) — Swiss mining giant Xstrata on Wednesday said it was dropping a bid for British platinum producer Lonmin in view of tightening credit and the ongoing financial turmoil.

But later on the same day, it said it had spent 440 million pounds (786 million dollars) acquiring 14.2 percent more of Lonmin during the day, bringing its total stake in the British firm to 24.9 percent.

Announcing the purchase, the group said it believed that the fundamentals of platinum are "robust."

Earlier, Xstrata chief executive Mick Davis said the group had decided to abandon a bid to acquire all of Lonmin "against a background of extreme volatility and uncertainty in the financial markets."

"The current lack of clarity and certainty regarding the future...