Lonmin is on the brink of selling an 18 per cent stake in its South African mining business to indigenous investors, it has emerged.

Reports in today's Financial Times suggest that the platinum mining heavyweight - the world's third largest platinum outfit - is set to hand over a stake in Lonplats.

Under the terms of the deal Incwala - a black-controlled investment vehicle - will assume the $650 million stake.

Three different black investment groups will thus operate 53 per cent of Incwala, with the remaining shares divided between Lonmin and the state's Industrial Development Corporation.

The new deal will bring Lonmin into line with the new Black Economic Empowerment (BEE) rules, heralding one of the most significant moves in the sector to date.

Brian Gilbertson, who will serve as Incwala's chairman, commented: "Incwala is in the happy position that it has equity capital - many BEE firms don't have that."