LON - Department of Mineral Resources orders Lonmin to suspend sale of

LON - Department of Mineral Resources orders Lonmin to suspend sale of          
associated minerals                                                             
Lonmin Plc (Incorporated in England and Wales)                                  
(Registered in the Republic of South Africa under registration number           
1969/000015/10)                                                                 
JSE code: LON                                                                   
Issuer Code: LOLMI & ISIN: GB0031192486 ("Lonmin")                              
Lonmin plc                                                                      
Department of Mineral Resources orders Lonmin to suspend sale of associated     
minerals                                                                        
Late on 4 August 2010, Lonmin plc ("Lonmin" or "the Company") received a        
letter from the Department of Mineral Resources of the Government of South      
Africa ("DMR") which contained an order to refrain from selling Nickel,         
Copper, Chrome and any other minerals ("associated minerals") other than        
Platinum Group Metals ("PGMs") with immediate effect, notwithstanding the       
natural occurrence of these minerals in the PGM reefs and seams. Lonmin will    
contest this matter vigorously and will be seeking an urgent court ruling to    
overturn this order.                                                            
Lonmin has mined PGMs and associated minerals at Western Platinum Limited and   
Eastern Platinum Limited for in excess of 30 years. Associated minerals are     
inextricably linked to PGMs in the ore body and it is not feasible nor          
economically viable to mine them alone. These minerals contributed US$80        
million to Lonmin`s turnover in the 2009 financial year. The previous legal     
framework gave miners the right to dispose of associated minerals for their     
own benefit, while the 2002 Mineral and Petroleum Resources Development Act     
("MPRDA"), under which Lonmin converted its mining rights in October 2006, is   
silent on this matter.                                                          
Whilst Lonmin believes it is entitled to mine and dispose of associated         
minerals, in order to protect its position, it filed MPRDA Section 102          
applications which would explicitly give Lonmin these rights. This was done     
in late 2009.                                                                   
The above mentioned applications did not cover 100% of Lonmin`s associated      
minerals as a prospecting right had already been applied for over the           
associated minerals on a small portion of Lonmin`s property, where we are       
mining the UG2 reef. This right was applied for in March 2009 and issued on     
12 May 2010 to a Holgoun Group company. Lonmin understands that Holgoun`s       
shares are held by interests associated with Sivi Gounden, who resigned from    
the Lonmin Board on 16 October 2009. Lonmin appealed against both the           
original application in March 2009 and against the award of this right on 11    
June 2010 and has not yet been notified of the outcome of the appeals made.     
Lonmin has taken comprehensive legal advice on this matter and believes that    
the action taken by the DMR is wrong and the Company will defend its            
interests robustly.                                                             
Lonmin is deeply disappointed that this situation has arisen. Lonmin extracts   
the associated minerals as an integral part of mining PGMs from these two       
reefs, Merensky and UG2.  The sale of these associated minerals has produced    
a revenue stream which has augmented taxable income and royalty payments, and   
has been reported monthly to the DMR.                                           
Lonmin has made, and continues to make, every reasonable effort to support      
the transformation process espoused by the South African Government. At the     
same time the Company has a duty to preserve, and indeed enhance the            
integrity and value of its operations in South Africa, which derive             
ultimately from its mineral rights and its licence to operate under the New     
Order Mining Licence.                                                           
Lonmin will spare no effort in resolving this situation. Meanwhile, our         
mining and processing operations will continue as normal.                       
ENQUIRIES:                                                                      
Investors:                                                                      
Alan Ferguson, Finance Director                   +44 (0) 20 701 6034           
Media:                                                                          
Cardew Group                                      +44 (0) 20 7930 0777          
Rupert Pittman/Jamie Milton                                                     
Financial Dynamics                                +27 (0) 21 487 9000           
Dani Cohen / Ravin Maharaj                                                      
5 August 2010                                                                   
Date: 05/08/2010 17:40:01 Supplied by www.sharenet.co.za                     
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