Lonmin, the world's third-largest primary producer of platinum, admitted yesterday that South Africa's power crisis, labour disputes and rising costs would severely dampen production this year.

The company lowered its full-year forecast for platinum sales by nearly 10pc to 775,000 ounces, and warned that production could be further hit if South Africa's power crisis continues.

Lonmin shares rose 16p to £32.98 on relief that the production cuts were not worse, although some analysts said the lowered target may be difficult to hit.

Brad Mills, chief executive, said Lonmin was involved in "preliminary dialogues" about setting up separate power stations in case the state provider Eskom is unable to deliver on its energy supply growth programme.