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Lonmin Plc

Update on Incwala Resources (Pty) Ltd 

Lonmin Plc ("Lonmin" or "the Company") today provides an update regarding Incwala Resources (Pty) Ltd ("Incwala"), Lonmin's Black Economic Empowerment partner. 

Lonmin confirms that discussions are on-going with the Historically Disadvantaged South African ("HDSA") shareholders of Incwala and the HDSAs' providers of finance regarding the future ownership of Incwala.  

There can be no certainty that these discussions will be successfully concluded and, if no conclusion is reached, there is a possibility that Lonmin could be called upon under guarantees given at the time of the formation of Incwala in 2004. In these circumstances, these guarantees would be funded from Lonmin's existing bank facilities. 

A further announcement will be made as and when appropriate.

- Ends -

ENQUIRIES: 

Investors / Analysts: 

Rob Gurner                                                                                               + 44 (0) 207 201 6050

Head of Investor Relations

Media:

Cardew Group                                                                                           + 44 (0) 207 930 0777

Anthony Cardew / Rupert Pittman    

Financial Dynamics                                                                                   + 27 (0) 11 214 2400 / 2410    

Dani Cohen / Ravin Maharaj

Notes to Editors: 

Lonmin was a key facilitator of the original BEE transaction with Incwala Resources in September 2004, and was a provider of certain vendor financing, third party loan indemnifications and related arrangements which enabled broad-based equity participation by HDSA shareholders in Lonmin's assets. 

A substantial proportion of the HDSA shareholders' bank-funded debt and vendor-financed debt is due to mature in September 2009 and will require refinancing. If the HDSA shareholders are unsuccessful in their attempts to secure refinancing of their debts then it is possible that some or all of Lonmin's contingent liabilities in respect of such debts may crystallise. As at 31 March 2009, Lonmin recognised contingent liabilities associated with these arrangements of a maximum of R930 million, of which R177 million would not become payable until 30 September 2011, if at all. Further details of these contingent liabilities can be found in Note 10 on page 34 of Lonmin's 2009 Interim Report for the six months ending 31 March 2009. 

However, it is also possible that alternative solutions involving the participation of Lonmin could be found, some of which could involve an economic cost to Lonmin in excess of the currently recognised contingent liabilities. Such solutions will only be considered if the Board believes they will promote the success of Lonmin for the benefit of its shareholders.

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