Loading...
See More

Expert: Lonmin strikers scored

Sep 21 2012 16:47 Sapa

Company Data

Lonmin plc [JSE:LON]

Last traded 33.51
Change 0.74
% Change 0.02
Cumulative volume 522885
Market cap 19.12bn

Last Updated: 20/10/2014 at 02:23. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Lonmin wage bill to rise by 14%

Platinum sector seeks bargaining model

Lonmin deal not lasting solution, MPs told

AngloGold workers on illegal strike

Amplats strike meeting allowed

 
Johannesburg - The six-week Lonmin [JSE:LON] strike was one of the few extended stay-aways where employees actually benefited from downing tools, an expert said on Friday.

Efficient Group chief economist Dawie Roodt said Lonmin workers had avoided losing more than they gained from the work stoppage, which was the most common occurrence following the resolution of a strike.

"This is one of the few instances where workers have been able to break even... or are slightly better off," said Roodt.

"What usually happens is that the strike normally erodes the nominal benefits. What it illustrates is that the increase was really substantial."

Workers at Lonmin's platinum mine in Marikana were granted a 22% pay rise and a once-off bonus of R2 000 each to return to work.

Roodt said the 22% was in reality a 12% raise on top of a 10% increase that was already in the pipeline.

Workers lost a maximum of approximately 12% of their annual wage during the strike, at 2% a week, he said.

If the R2 000 once-off payment was included with the wage increase, it appeared workers had gained, making the strike worthwhile.

Chris Hart, senior economist at Investment Solutions, said the way the strike was resolved had implications for South Africa's economy and labour market.

"First, an enormous leap in costs because of what happened at Lonmin will be replicated across the mining and the manufacturing sectors. Already those industries are struggling for investment," he said.

"The big concern was that this took place outside the bargaining process."

The second implication was the number of jobs that would be lost in the medium- to long-term, with the viability of the mining industry being in question.

Hart said investor viability would have been affected, with South Africa being seen as an unreliable supplier, with the possibility of sources being developed elsewhere in the world.

"Even a tiny platinum discovery (elsewhere) will be developed instead of investing in South Africa."

Roodt said that the Lonmin settlement had set a bad precedent.

"Other workers are going to see this, and (believe) if they put (up) enough pressure, companies are going to give in. The monetary incentive may lead to more wildcat strikes."

He said any potential take-over of Lonmin was risky, considering that management and workers had reached a type of truce, with investors having to believe they were getting a bargain.

The strike ended this week, when workers and the company reached a pay agreement.

In terms of the agreement, the lowest paid worker would earn R9 883 a month and the highest, R13 022.

Illegal strikes have spread to other platinum and gold mines in the country following the start of the strike at Lonmin on August 10 and during which 46 people died - 34 of them shot dead by the police.

*Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.
lonmin  |  dawie roodt  |  chris hart  |  mining unrest
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
7 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...