• Busting Uber myths

    The ehailing firm is constantly trying, succeeding - and sometimes failing, says Ian Mann.

  • Trapped in a democracy

    The very people elected to bring benefits to all are undermining SA, says Solly Moeng.

  • Marikana spectre

    Five years after the bloody massacre calls for justice are growing louder, says Terry Bell.


Lonmin: We can't meet pay demands

Sep 17 2012 07:47

Johannesburg - Lonmin [JSE:LON], due to resume talks on Monday with strikers at its Marikana platinum mine who rejected a pay rise offer last week, insisted it could not meet the workers' demands but promised a new approach in labour relations.

Acting chief executive Simon Scott said the deaths at the mine of protesters, 34 of whom were shot dead by police on August 16, had been a "wake-up call" for the company and it was committed to ending the five-week labour unrest in which a total of 45 people have been killed.

In an opinion piece published in the Sunday Times newspaper, Scott said Lonmin would improve discussions with strikers although it could not afford to meet their higher wage demands.

"For Lonmin, the starting point is to acknowledge that our company must go through a process of self-reflection," Scott said.

"What I can promise is that we are committed to playing our part. We have had our wake-up call, as has the rest of South Africa.

"Clearly, one of the issues we need to reflect on is how we find balance between protecting the business, and the jobs dependent upon it, on the one hand and how we respond with sensitivity to the complex situations that Lonmin is at the centre of," Scott said.

The company also said said that reports indicating it had made a second wage offer were incorrect, and its offer remained unchanged.

"Lonmin wishes to make it clear that reports indicating it has made a second offer are incorrect," it said.

"Lonmin reiterates its position that the R12 500 demand is unaffordable and would result in a trade-off between wages and jobs."

On Friday workers at the mine dismissed the company's offer as way below the R12 500 a month sought by members of the militant Association of Mineworkers and Construction Union (Amcu), which is challenging the influence of the more established National Union of Mineworkers (Num).

Unrest spreads

The dispute at Marikana has been at the heart of unrest, in which a total of 45 people have been killed, that has spread through the platinum sector in South Africa, the world's top producer of the metal, rattling Africa's biggest economy.

The labour unrest has also highlighted a power struggle within the ANC.

ANC rebel Julius Malema has seized on it to return from the political wilderness, urging strikers to make mines "ungovernable".

The Hawks said it was investigating a case against Malema, opened by trade union Solidarity early this month, of incitement of violence and intimidation.

"That case has been referred to us and we are currently investigating," Hawks spokesperson MacIntosh Polela said.

"We are not going to narrow it to Marikana. We are just going to look for evidence of this incitement, aspects of it are going definitely to be Marikana."

The rand fell 3% on Wednesday as the unrest engulfed Anglo Platinum [JSE:AMS], the biggest miner, and ripples began to reach the bond market.

On Friday police fired teargas and stun grenades to disperse another group of striking miners at an Aquarius Platinum [JSE:AQP] plant.

Scott, who has been acting chief executive while Ian Farmer has been on sick leave since last month, reiterated the company's position that a R12 500 monthly wage would put thousands of jobs at risk and challenge the viability of the business.

"In stark financial terms, this would cost R2.3bn," he said.

The company is offering increases of between 9% and 21%.

In a statement on Sunday it denied a report by Num that it had improved its key offer to rock drill operators, who are at the centre of the unrest.

Num said on Saturday Lonmin had raised the offer to these workers from an earlier proposal of R900, but the company said it had already been offering them a rise of over R1 800 a month, excluding bonuses.

The price of platinum, used in jewellery and vehicle catalytic converters, has risen more than 20% since the Marikana shootings amid fears of disruption to supplies.

Even though the Lonmin wage offer was rejected, its shares rose 5.5% on Friday on the back of another jump in the platinum price following the announcement of US economic stimulus measures.

Lonmin has said its talks are to resume at 08:00 GMT on Monday.

* Follow Fin24 on TwitterFacebookGoogle+ and Pinterest.

lonmin  |  mining unrest



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
Comments have been closed for this article.

Company Snapshot

We're Talking About...

Savings Month

It's never too late to start saving. Visit our special issue and add your voice.

Money Clinic

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

Voting Booth

The proposal to nationalise SARB will

Previous results · Suggest a vote