Shares in Lonmin were up on the FTSE 100 in morning trading after the mining company reported a return to profit in the full year ended 30 September.

The group said it had achieved the sale of 706,000 ounces of platinum, in line with guidance given a year ago, and had kept the cost per ounce increase at two per cent.

Lonmin said that its available ore reserves had risen 32 per cent from the previous year and that its safety performance had improved but still has "more to do".

The real news however was that the group went from a pre-tax loss of $111 million last year to a pre-tax profit of $237 million this year. As a result, Lonmin said it was re-introducing a dividend at 15.0 cents per share.

For 2011 Lonmin said it expected platinum sales to rise to 750,000 ounces, however the group also predicted inflationary pressures for labour and power and a shortage of the skills needed in the mining industry.

Capital expenditure is expected to be around $380 million next year, the group said.

Ian Farmer, Chief Executive Officer of Lonmin, said, "I am delighted that the actions that we have taken to rebuild the Company's operational health are so clearly demonstrated in these results. We have delivered sales figures in line with guidance, and performance improvements have been seen across our business. We have met our key operational targets and this performance reflects the successful turnaround of our business.

"We intend to build on this strong operational performance and anticipate that Platinum sales will grow to around 750,000 ounces in 2011. While there are challenges facing our industry, we believe that the fundamentals of the PGM markets remain robust and that Lonmin is well placed as these markets improve in 2011 and beyond."

By 10:50 shares in Lonmin were up 2.60 per cent on the FTSE 100 to 1,813.00 pence per share.

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