Aug. 8 (Bloomberg) -- Xstrata Plc, making a hostile 5 billion-pound ($9.8 billion) bid for Lonmin Plc, bought shares of the world's third-biggest platinum miner from BlackRock Inc., fund manager Evy Hambro said.

Hambro, managing director of BlackRock's $15.3 billion World Mining Fund, said he accepted Xstrata's 3,300-pence-a- share bid ``rather than wait for a higher offer that may never eventuate.''

``Given the depressed valuations in the rest of the sector, we saw more upside in redeploying the proceeds from the sale of our Lonmin shares into other mining equities,'' Hambro said today in a telephone interview in London.

Xstrata plans to restore production at Lonmin's South African mines and smelter to the level seen two years ago. London-based Lonmin yesterday rejected the mining company's offer as ``opportunistic'' and ``wholly inadequate.''

Hambro declined to give further details of the sale. BlackRock sold 3.2 million shares, or 2.1 percent of Lonmin, at 3,300 pence apiece, it said yesterday in a statement. Zug, Switzerland-based Xstrata said Aug. 6 it hel 10.7 percent of Lonmin.

The offer was 42 percent more than Lonmin's closing share price on Aug. 5, the day before Xstrata made its proposal. Lonmin dropped 1 pence to 3,439 pence as of 1:37 p.m. on the London Stock Exchange. The FTSE 350 Mining Index has slumped 31 percent since reaching a record on May 19, following commodity prices lower.

Lonmin said Aug. 6 its production will be about 725,000 ounces of platinum for the year to Sept. 30. That's the third time in 2008 it's lowered the forecast.

To contact the reporter on this story: Brett Foley in London at bfoley8@bloomberg.net

Last Updated: August 8, 2008 08:50 EDT