Johannesburg - World No 3 platinum producer Lonmin
[JSE:LON] is racing to resume ore extraction at its Marikana site, with no
guarantee striking workers will return this week after a mourning period for
comrades killed in a wave of labour unrest.
Lonmin's South African operations have been paralysed since
an illegal strike involving 3 000 rock driller operators started two weeks ago
and exploded into violent clashes that killed 44 people, including 34 striking
workers gunned down by police.
Lonmin accounts for about 12% of global platinum output and
the freezing of its mining operations has driven the price of the metal up by
The company said more than half of its 28 000-strong
workforce showed up for shifts on Saturday - more than last week but far short
of the numbers needed to start pulling ore from the earth.
"Mining operations will only resume once we have
sufficient workers in attendance and the necessary safety procedures have been
undertaken," Lonmin said on Friday.
It was not clear when they would get those numbers. Some
workers have signaled the "martyrdom" of their colleagues raised the
stakes and it would be a betrayal if miners returned unless they won the wage
increases that they have demanded.
The striking workers have been demanding a monthly wage of
R12 500. The company says they get about R9800 with an average monthly bonus of
The government said at the weekend the world's largest
platinum producers were discussing a move to collective bargaining.
The platinum sector negotiates with unions on a
company-by-company basis, leaving individual firms open to labour discontent as
rival organisations promise workers better deals.
This has created wage disparities between platinum companies
that do not exist in the gold and coal sectors, which bargain collectively.
The violence at Lonmin stems from a bloody turf war between
the dominant National Union of Mineworkers (Num) and the small but militant
Association of Mineworkers and Construction Union (Amcu) which has been
spreading through the sector.
Lonmin's acting chief executive Simon Scott said the company
was hoping a "peace accord" mediated by the department of labour
could be reached between the warring sides.
"We are dealing with tragic and challenging issues, and
will be for a long time to come, but for the sake of the company, its many
thousands of employees and the industry which supports them, we need to find a
sustainable peace accord which allows people to return to a working
business," Scott said.
Lonmin last week backed down from a threat to sack the 3 000
striking workers as the country marked a period of mourning for those killed in
Lonmin has also said it may issue new shares to shore up a
balance sheet hit by the lost production and revenue. Its situation will become
tougher the longer its mines are idle.
Analysts have speculated the company may try to raise new
capital from shareholders as existing agreements with lenders require it to
keep a lid on its debt-to-profit ratios. The company said those ratios would
likely be breached by September 30.
Lonmin had already slashed spending plans before the latest
flare-up of violence and may miss its annual production target of 750,000
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