Jan. 2 (Bloomberg) -- Lonmin Plc and Aquarius Platinum Ltd. advanced in London trading as the precious metal headed for a fourth successive weekly gain, improving the mining companies’ profitability.

Platinum for immediate delivery in London has gained 5.6 percent this week, and traded today at $948 an ounce, the highest in 12 weeks. Lonmin, the world’s third-largest producer of the metal, climbed 13 percent on the London Stock Exchange while Aquarius gained 21 percent.

“With the platinum price going above $930 it is giving them all a bit of breathing space for the March quarter,” Alex Wood, an analyst at Mirabaud Securities Ltd., said in a telephone interview. “That makes a massive difference to the margins and the ability of these companies to generate cash.”

Platinum tumbled 39 percent last year on lower demand for catalytic converters, the biggest use of the precious metal. Toyota Motor Corp., the world’s second-largest auto maker, forecast its first operating loss in 71 years while General Motors Corp. and Chrysler LLC sought rescue loans from the U.S. Treasury to help them avoid collapse.

Lonmin gained 114 pence to close at 1,025 pence in London. Aquarius advanced 35.25 pence to 209.75 pence.

Platinum increased 0.7 percent to $941 an ounce as of 4:51 p.m. in London. Nickel, copper and other industrial metals also gained on the London Metal Exchange.

Job Cuts

Lonmin, which fell 71 percent last year, said in November it will reduce output, halt expansions and eliminate jobs in South Africa to offset falling demand. The London-based company may cut as many as 5,400 jobs, or about 17 percent, of its workforce.

Plunging metal prices and turmoil in financial markets prompted Xstrata Plc to scrap a 5 billion-pound ($7.25 billion) hostile bid for Lonmin on Oct 1. Fourteen analysts have a “sell” recommendations on Lonmin and four say “hold,” according to data compiled from 18 analysts by Bloomberg.

Aquarius, which is based in Bedfordview, South Africa, slumped 70 percent last year. Investec Securities cut its earnings target for the company by 70 percent on expectations of lower output in 2009, London-based analyst Rebecca O’Dwyer said in a note on Dec. 19. The mining company may make a loss if platinum prices fail to recover, she said.

To contact the reporter on this story: Thomas Biesheuvel in London tbiesheuvel@bloomberg.net

Last Updated: January 2, 2009 12:03 EST