By Silvia Antonioli
LONDON (Reuters) - Shares in Lonmin (L:LMI) fell by 5 percent on Friday and were set for their biggest weekly loss in almost three months after Glencore (L:GLEN) handed over its stake to its shareholders this week, highlighting investor concern over South Africa's troubled platinum sector.
Mining and commodity trading house Glencore had inherited the 23.9 percent stake in platinum producer Lonmin through the purchase of Xstrata in 2013 but said platinum was not one of its core commodities.
It had announced in February its intention to distribute the shares to investors on Jun. 9. Shares in Lonmin, the world's third largest platinum producer, sank by about 9 percent on the day of the distribution.
They were down by more than 5 percent by 1050 GMT on Friday, making Lonmin one of the biggest losers on the FTSE-250 index of mid-cap stocks.
Analysts had expected some selling pressure on Lonmin, anticipating many investors in Glencore, a diversified commodity player, would ditch the Lonmin shares because they were unwilling to bet on platinum.
The white metal has lost about 43 percent of its value from a 2011 peak of more than $1,900 an ounce and its outlook remains cloudy.
Lonmin has proved a bruising investment for Glencore.
The worst-affected among the three largest platinum producers by a record mining strike in South Africa last year, its shares have lose almost half of their value since Glencore completed the Xstrata acquisition in May 2013. The company now has a market capitalisation of around 815 million pounds ($1.25 billion).
London-listed Lonmin, also at the centre of the violent 2012 Marikana strike which left 34 miners dead, had to rely on a $800 million rights issue in November 2012 to shore up its finances,
Last month it announced plans to cut 3,500 jobs at its mines in South Africa, highlighting the distress low prices are causing to the platinum industry.