Xstrata’s attempted takeover of Lonmin, the platinum miner, has received a boost following the surprise exit of the platinum miner’s chief executive.

Brad Mills is to step down with immediate effect, just days before rival Xstrata must decide whether it is to launch a £5 billion takeover bid. Ian Farmer, the chief strategic officer, replaces Brad Mills, who analysts have blamed for Lonmin’s recent problems.

The change of chief executive at such a crucial stage in Lonmin’s bid to stay independent is a sign that the world’s third largest platinum miner has in effect resigned itself to a takeover by Xstrata, according to Michael Rawlinson, head of mining, resources and energy at Liberum Capital.

“It looks like they are rolling over for Xstrata and saying `Come and get me,’” he said.

Sir John Craven, Lonmin Chairman, said: "The board has an ongoing duty to manage Lonmin in the best interests of shareholders. We have decided the time is right to appoint a new chief executive officer and we believe Ian is the right person to lead the group."

Xstrata unveiled a proposed takeover offer of £33 per share worth $10 billion in August, but has been set a deadline by the Takeover panel that it must say by Thursday whether it will make a formal bid. Under takeover rules Xstrata cannot offer less than its existing outline offer.

"I simply can't believe that Xstrata won't go ahead with this," said analyst Tom Gidley-Kitchin at Charles Stanley.

"Since they announced the (proposed) offer the cost of debt may have gone up a bit, maybe the first year's cash flows from Lonmin have gone down a bit, but they're looking ahead on a 10-year view," he said.

Lonmin had rejected the Xstrata approach, claiming that the £5 billion offer undervalues its platinum mines in South Africa.

Xstrata has reportedly approached 22 banks to make commitments for a $15 billion loan to both fund the Lonmin takeover and refinance existing debt.

One issue that may have given Xstrata pause is the collapse of the platinum price, which has halved since touching a record of $2,290 per ounce in March and shed 30 per cent since Xstrata announced is proposed offer.

Mr Mills and management have also been criticised over the firm’s reduction of its production targets because of problems at its South African mines and the declining platinum price.

Shares in Lonmin closed down 14.62 per cent at £21.08 while Xstrata’s stock were down by 17.47 per cent at £15.78.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive