* Share price falls sharply
* Analysts doubt Lonmin's ability to deliver on salesguidance
* Protest at London AGM demands compensation
By Zandi Shabalala
LONDON, Jan 26 (Reuters) - Lonmin reported weakerthan expected output on Thursday, causing analysts to raisedoubts over 2017 production targets, and faced demands forcompensation following the shooting of 34 miners at Marikana inSouth Africa's platinum belt.
The company reiterated its sales guidance for 2017, but saidlarger shafts, known as generation 2, had disappointed andproduction from them was 5.2 percent lower in the final threemonths of last year than in the previous year.
The production shortfall added to steep losses for Lonmin'svolatile share price. It was down more than 16 percent by 1230GMT. The wider sector was roughly flat.
Platinum prices, which rose just one percent lastyear, have failed to join a rally in other commodities andLonmin has lagged the wider recovery in the mining sector thatstarted last year.
Lonmin said it was maintaining its focus on generation 2shafts, while trying to cut its capital spending.
"We remain committed to delivering sustained productivityimprovements at our operations to ensure the long-term viabilityof the business," Lonmin said in a statement.
Its London AGM attracted a protest demanding the company beheld responsible for the incident dubbed the "Marikana Massacre"when in August 2012 South African police shot 34 striking mineworkers.
A nearly three-year long commission of inquiry in 2015 foundLonmin, police and unions were responsible for the killings.
The protesters on Thursday added their voice to calls fromcivil society groups for compensation for the families of thedead miners, a public apology and a monument.
"The corporation has a new chief executive who after themassacre promised would be a new broom, sweeping clean," AndyHigginbottom from the Marikana Miners Solidarity Group said.
"All we have seen so far is the new broom sweeping thingsunder the carpet."
Analysts at BMO Capital Markets in a note said it remainedcautious on Lonmin's "ability to deliver".
It did not assign a target price to Lonmin "due to itshighly volatile share price in the current commodity price andoperating environment". (Additional reporting by Barbara Lewis, editing by David Evans)
