The shooting by police of striking miners at Lonmin’s Marikana mine highlights the socioeconomic challenge all South African mining companies face as they cut costs to remain profitable. Producers of platinum also have to cope with overcapacity amid a glut, a weak European motor industry, soaring labour costs and rising energy prices. Lonmin was merely the latest miner to be hit by a strike after Impala Platinum emerged from six weeks of disruption. Although the strike at Lonmin ended yesterday, the damage could exacerbate the London-listed miner’s financial problems.

That would be a pity. Things were looking up after Ian Farmer, chief executive, dealt with legacy production problems. Lonmin reported fewer safety stoppages and less lost production in its June quarter. Now, in seven days, it has lost 15,000 ounces, jeopardising full-year output guidance of 750,000 ounces. That has given the platinum price a boost, but it is still down more than a fifth in the past year. And while all producers need to cut costs and production, Lonmin has had both thrust upon it.

Capital expenditure has been curbed ($20m this year; $200m annually in 2013 and 2014). But that also means it will not be driving down unit costs via increased output. Lonmin is trying to fix its balance sheet. But net debt could still rise to 3.3 times earnings before interest, tax, depreciation and amortisation by its September year-end, according to Deutsche Bank – dangerously close to its 3.5 times covenant level on rand debt. Lonmin has let itself get in this mess before (in 2009, when it raised $490m). But, given Aquarius Platinum’s woes after it revealed extreme balance sheet weakness, Lonmin should not delay in calling for, say, three years’ capex, or about $600m, to buy itself breathing space through the downturn. Marikana needs to be at least a turning point.