Lonmin's licence under threat

Johannesburg - The government threatened to remove Lonmin’s mining licence for its failure to improve employees’ living conditions, four years after striking workers were killed in a massacre near its Marikana mine. Some police officials will be charged with the deaths and covering up evidence.

Lonmin [JSE:LON] has been too slow to build accommodation for its workers, many of whom still live in temporary shacks, and must submit a renewed housing plan to the government, the office of President Jacob Zuma said in emailed statement on Sunday. Meanwhile, criminal cases will be brought against police officials for their role the tragedy in which 44 people died, including 34 shot by members of the force in a single day.

"This is massive, absolutely massive because it is giving real cause to our laws to say that you cannot abandon people and keep your licence as a mining company," Bonita Meyersfeld, head of the Centre for Applied Legal Studies at the University of the Witwatersrand, said by phone on Monday.

Mining companies "cannot just come into the country, extract resources and benefit from that without giving back to the communities in those mining areas," she said.

Lonmin's share price dropped almost 3.5% in early trade on Monday, and by 12:15 the share was trading at R24.11, 2.35% lower that its previous close.

A dispute between Lonmin and a small band of employees, fuelled by union rivalry, over several days in August 2012 quickly spiralled out of control and ended up as the biggest shooting by South African security forces since the end of apartheid in 1994.

The massacre prompted a lengthy inquiry by retired Judge Ian Farlam, who found that police and the company made many errors that caused the incident to escalate.

Commissioner’s fitness

The inquiry cleared Deputy President Cyril Ramaphosa, who was a non-executive director at Lonmin then, and two other ministers of wrongdoing but the government is willing to pay compensation to victims’ families and those who were injured, the presidency said.

A board of inquiry will "look into the fitness to hold office" of Police Commissioner Riah Phiyega, the presidency said. She was appointed not long before the tragedy and had never worked in the police before.

Prosecutions will be recommended against a number of policemen for murder, attempted murder, obstructing justice, and giving false testimony.

Improving workers’ living conditions was a key recommendation of the commission but four years on, Lonmin hasn’t fulfilled its obligations, the presidency said.

The company recently completed a housing project of 325 units, which are not yet occupied, and has converted all its hostels into 2 700 homes, a plan that was a decade in the making.

Lonmin employed almost 36 000 people at September 30, 2015.

"Progress is slow," the presidency said. "A compliant housing plan will be requested from Lonmin, failing which immediate action in the form of suspension or cancellation of the mining right will be taken."

Lonmin is working with the government to find "a lasting solution" to the housing problem, Abey Kgotle, the company’s executive vice president of human resources, said by phone.

The company will submit a new plan and is considering handing over more land to the government to build accommodation, he said.