Lonmin Plc , the world's third biggest platinum producer, has closed down its troublesome No. 1 furnace for repairs which were estimated to take around a week, the company said on Monday.

As we repair the furnace we will assess the impact of this incident on production and sales for the 2008 financial year, a statement said.

Lonmin, with its main listing in London and with operations in South Africa, has twice cut its sales target for the financial year to end-September due to operational problems and because of a power crisis in South Africa.

In January, it cut the sales target to 860,000 ounces of refined platinum from 900,000 ounces and in April reduced it further to 775,000 ounces.

Lonmin said the latest problem was due to a small water leak in one of the waffle coolers of the furnace. The estimated closure of the furnace for seven days would be confirmed once an inspection took place.

The No. 1 furnace has a history of difficulties.

It was closed down due to a water leak in December 2006 but due to previous problems the firm decided to spend $6.5 million to completely rebuild the furnace. It took over four months and slashed first half platinum sales last year by around 200,000 ounces.

Supply problems in South Africa, the world's largest producer of platinum, have helped boost platinum prices to record highs. Platinum has surged 60 percent over the past 12 months, touching a record of $2,290 per ounce on March 4.

In May, Lonmin posted a 63 percent jump in first-half profit on strong platinum prices, but withdrew a long-term output target due to the South African power problems.

The company had been aiming to boost output to 1.2 million ounces by 2012 by building new mines, but said this was now in doubt.

Output in the 2007 fiscal year fell by 16 percent to 793,584 ounces. (Reporting by Eric Onstad; Editing by Louise Ireland and Quentin Bryar)

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