Lonmin, the platinum producer, said yesterday that its revenues had fallen by more than half to $1 billion (£596 million) this year after a collapse in the price of the precious metal.

More than half the world’s platinum is used in catalytic converters for cars and the steep drop in vehicle sales prompted a crash in platinum prices.

The declining revenues, combined with high mining costs, pushed Lonmin to a $272 million loss in the year to September 30, after a $779 million profit the year before. The company expects an improvement in prices as demand picks up, but supply remains constrained. The prospect of rising prices made Lonmin the biggest riser in the FTSE 100 yesterday, closing up 148p, or 9.3 per cent, at £17.40.

Ian Farmer, chief executive, said: “We see a gradual recovery in 2010 but nothing stellar. In 2011 and 2012 the auto industry should start to come back ... and there will be some replacement demand.”

Lonmin has faced a torrid year, suffering a number of smelter and production disruptions. Brad Mills, the former chief executive, left the company. It produced 682,955 ounces of platinum in the past year and has set a target of 850,000 ounces by 2013. Only two years ago, Mr Mills predicted that Lonmin would reach 1.4 million ounces by 2012 and move on to two million ounces in the future.

Analysts are concerned that if metal prices do not improve, the miner will be forced to seek another bailout from shareholders, after the $458 million rights issue this year. Analysts at Investec said: “We believe the key question for Lonmin over the next six months will be whether it needs to raise funds for this growth. We think this will largely depend on where the platinum price goes.”

Mr Farmer said he did not expect to raise more money in the coming year.

One bright spot is continued robust demand for platinum jewellery in Asia. Lonmin said that the high cost of gold had resulted in the gap closing between gold and platinum jewellery.

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