Lonmin, the world's third largest platinum miner, reported a 12 per cent fall in annual pre-tax profits yesterday.

The company explained that the surging rand - which continues to appreciate against the dollar - is responsible for the decline in profits, as miners incur most of their costs in rands.

Chief executive Edward Haslam said that Lonmin's business plan remained unaffected, despite the decline in revenue.

'We are on track to meet our target of one million ounces a year by 2008 and our current trading remains satisfactory,' he said.

Platinum production for the year ending on 30th September was above target, and rose 23 per cent to 932,687 ounces. Pre-tax profit fell to $291 million from $332 million; some analysts' expectations had been as low as $224 million, although others predicted $367 million.

Attributable profit declined to $74 million, down from $185 million. A $183 million tax charge, inclusive of exchange losses worth $85 million, weighed this down.

Even so, analysts such as Nick Hatch from Investec Securities are confident that Lonmin will take advantage of other market conditions.

'The results are fine, current trading remains satisfactory and the company will continue to benefit from very strong platinum prices,' he said.