S.Africa says Lonmin base metals rights 'imminent'

JOHANNESBURG (Reuters) - Lonmin, the world's third-biggest platinum producer, is likely to receive approval soon to sell the base metals it was ordered to stop selling last week, South Africa's mining ministry said.

Lonmin said last Thursday the Department of Mineral Resources (DMR) instructed it to stop selling nickel, copper and other offshoots of its platinum production as it had not been granted rights to those metals, knocking its shares down 5 percent.

After a new mining act took effect in 2004, holders of existing mining rights were entitled to convert them into new rights, but the DMR said Lonmin had only converted its rights for platinum group metals, not associated minerals, for which it only applied at the end of 2009.

"Decisions for Lonmin's applications for the inclusion of associated minerals as part of its converted mining rights are imminent," DMR said on late on Tuesday.

The approval, however, will exclude an area over which empowerment group Keysha Investments 220 had received prospecting rights, the DMR added.

"(The DMR) is puzzled by the fact that Lonmin chose not to apply for the inclusion of these minerals earlier. It only sought to do so once the Keysha application process was well underway," it said.

Keysha applied for a right in a small portion of the Lonmin conversion areas and its application was processed on a first-come, first-served basis, the DMR said.

Lonmin, which made associated minerals sales of $80 million in 2009, about 8 percent of its revenue, has appealed the granting of the prospecting right.

Lonmin officials said the company could not comment because they were in discussions with the DMR.