Profits at Anglo-African mining firm Lonmin have almost halved thanks to sinking prices last year for platinum, its main product, amid the general economic slowdown.

But the company, the third biggest listed platinum miner in the world, said demand was picking up again, dragging prices northwards, while new ventures in Australia and Canada would help the business grow.

Before tax, the company - whose current operations are mainly in South Africa - made a profit of $138m (�94.5m) in the six months to March, down from $252m a year earlier.

Then, Lonmin insists, prices were at an unsustainably high level averaging at $586 an ounce.

Since that time the price has come down to about $460, which chief executive Edward Haslam said was much more realistic.

Dollar vs rand

With prices more reasonable and the global economy turning around, demand from industry - particularly the automobile business, since platinum is a key ingredient in most catalytic converters - is on the way back up.

New rules in Europe and elsewhere on recycling cars could also offer an opportunity, the company said, offering the chance to soak up some excess refining capacity.

The resurgence of demand is good news for Lonmin - particularly because the extremes of exchange rate movements last year worked in its favour.

The 38% fall in the rand in 2001 meant unit costs were 24% lower when measured in US dollars than the same time the previous year.

The reverse is likely to be true this year, with the dollar showing weakness and the rand picking up steam again.