Marketing Plan for Lonmin

1. Introduction

Lonmin Plc is the world's third largest primary platinum producer, with a primary listing on the London stock exchange. They have four mines located in South Africa, three in the Marikana area and one in Limpopo province. Lonmin process the concentrate from their mines through their Smelter and Refineries to deliver finished metal to market.

2. Financial Summary

1

§ Operating profit for the year amounted to $353 million an increase of 20% on the prior year.

§ Gross profit for the year was $373 million

§ Turnover increased by $98 million to $1128 million.

§ Cost of sales for the period was $755 million.

§ 17% increase in the average price realized for basket of metals sold.

§ Sales volumes of PGMs decreased from 1,761,171 ounces to 1,692,517 ounces

§ Underlying earnings per share increased from 96.9 cents per share to 124.9 cents per share.

§ Net cash inflow from operating activities was $377 million during 2005, a 6% decrease on the previous year's figure of $400million.

§ The graph shows the value, at 30th September 2005, of $100 invested in Lonmin's shares five years previously, compared with the current value of the same amount invested at the same date in the FTSE All Share index, assuming dividends are reinvested in each case.

3. Marketing Audit

3.1 8 P's

3.1a Product

§ Lonmin mines and refines five Platinum group metals (PGMs):

- Platinum

- Palladium

- Rhodium

- Ruthenium

- Iridium.

§ Lonmin produces over 900,000 ounces of Platinum (1,700,000 ounces of total PGMs) per year

§ PGMs lend themselves to a myriad of different applications, these includes; fountain pens, aircraft turbines, anti-cancer drugs, mobile phones, catalytic converters for automobiles, ceramic glazes. It is estimated that about one in four things we use daily owes its existence to PGMs.

3.1b Place

§ The company has four mines located in South Africa

- three in the Marikana area

- one in Limpopo province

§ Lonmin sells PGMs into all of the major markets in Europe, the US and Asia.

3.1c Price

§ The Platinum market remains very strong with prices reaching record levels, increasing by some 16% since the beginning of October 2005.

3.1d Promotion

§ Lonmin Plc is a member of the International Platinum Association, dedicated to the promotion of PGMs and fostering a better understanding of the metals' utilities and diverse roles.

3.1e Profit

§ Gross profit for the year was $373 million (refer to financial summary)

3.1f People

§ Diversity- Lonmin subscribes to the principle of equal opportunity for all and has implemented a number of procedures to ensure compliance with the requirements of the South African Employment Equity Act.

§ Training and Skills Development- $9.7 million was invested in training, skills development and competence training during 2005.

§ An Era Labour Agreement was signed in June, which gives the company five years to develop their relationship with employees.

3.1g Process

§ The three main processes involved in PGM production are:

- Extraction

- Concentration

- Refining

§ Refer to appendix B

3.1h Physical Evidence

§ Safety- While Lonmin is committed to zero harm at all their operations, they have reported a lost of six lives as a result of work related accidents.

3.2 McKinsey's 7 S'

3.2a Structure

§ No information was disclosed on Lonmin's structure

3.2b Style

§ Historically Lonmin's relationship with its employees was in the command and control style; however they are committed to addressing this by creating team base structures with employees, as this was having an effect on productivity and cost.

3.2c Staff

§ Lonmin employs 28 people in its London head office and around 21,000 in their South African operations.

§ Average personnel turnover in 2005 was 15.9%.

§ 75% of workforce is South African, 25% represents migrant workers

§ 86.6% of employees are represented by a labour organization of their choice.

3.2d Skills

§ A five-year Adult Basic Education and Training strategy has been approved, providing every employee the opportunity to undertake literacy and numeracy courses.

§ A variety of comprehensive skills programmes, bursary and scholarships schemes, learnerships and study assistance programmes, is provided to address the need for vocational, functional, multi-skilled and future critical skills.