South African firm Lonmin, the world's third-largest platinum producer, may be considering mergers and acquisitions in the metals industry equal to its own current market value of $3 billion (£1.6 billion), reports claim.

Brad Mills, the firm's new chief executive, told investment bank Morgan Stanley that he was looking to buy up copper, nickel, platinum group metal and gold production assets, according to Bloomberg.

Mr Mills, formerly the head of base metals at BHP Billiton, was appointed in February and instructed to determine whether Lonmin should seek to diversify its activities away from platinum and other precious metals mined in South Africa.

The company has recently suffered from the strong rand and investor concerns about racial issues, and is looking for fresh direction, although its board has not yet set a deadline for any acquisitions.

Moreover, Morgan Stanley believes that strong metals prices would mean a premium on any acquisitions, and believes the firm should wait for lower asset valuations and pursue smaller businesses.