Lonmin: We can't meet pay demands

2012-09-17 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.

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  • charlesdumbwin.dumbwin - 2012-09-17 07:53

    If R 12 500 had to become the new minimum wage in South Africa, then our economy would collapse because there simply isn't enough money. And this is what they cannot get through their thick heads!

      jean.tredoux.5 - 2012-09-17 08:03

      I actually think there is enough money but our politicians and gov officials needs comes first tho. Too much is being spent on, blue lights personal insurance, ipads, vehicles, personal improvements on their lifestyle, traveling... This list is truly endless!

      john.halfpenny.395 - 2012-09-17 08:07

      Michael. seems you read lol. Seriously dude. If there was any credibility to that conspiracy theory Lonmin or the workers would have mentioned something as such.

      klasgoran.olsson - 2012-09-17 08:07

      Well, just a reflection according your comment. What says the miners wage shall be the minimum level? I do not defend their violent approach, not at all, that approach has just created new problems for them. That is shown by the comments in this paper. Instead of getting support there has been so much criticism towards them. The criticism has become worse since Malemas entered the stage. But if we try to broaden the horizon and look at the miners situation as a whole, it is not hard to understand they deserve better. I guess their demand of better envirionment and better wages are relevant. If the wage shall be 8.000, 10.00 or 12.500 I dont know. But they deserve better, and for sure better leaders.

      lusanda.tshaka - 2012-09-17 08:17

      @micheal.j thing is the miners are now striking at the lonwin company not at Cyril Ramaposa, and in truth the company is not able to afford that steep increment.

      infijar.ken - 2012-09-17 08:44

      Michael, surely if all the labour force worked through a Labour Broker, then their disagreement would be with the Broker not the Company? There appears to be so much misinformation coming from the News Media, I am not really sure what the dispute is about. On e News, live from the pit head the other day, the reported quoted that the miners wanted an increase of R12,500.

      michael.barns.1 - 2012-09-17 09:12

      Country wide minimum wage yes that would cripple us. A mining minimum wage no not at all. 3000 striking workers who say they are paid R4500pm and want R12500pm, thats an extra R8000pm x 3000 strikers = R24million pm extra x 12 months = R288 million per year extra. Now Lonmin made over R2 billion profit last year, so if they continued as per normal disregarding this strike and didnt improve year on year they would make just over R1.8 billion profit. Hardly the R2.3 billion loss that Mr. Scott implies, I think he needs to go back to school and learn maths 101.

      darren.raath.5 - 2012-09-17 09:18

      @michael.labour brokers are a neccecity.if i need to hire a temp i go through a not allowed to hire tempts due to the stupid labour laws that insist on permanent positions,which coupled with making it impossible to fire a lazy or incompetent worker make brokers very important. if the unions succeed in closing them down coupled with huge salary rises which the country can ill afford we would see our economy shrinking quicker than zimbabawes.

      malcolm.james.macleod - 2012-09-17 10:13

      @Feeble: Quote from the 'article' - "Cyril Ramaphosa in fact owns 9% of Lonmin" The Cyril Ramaphosa trust owns ~30% of Shanduka, Shanduka owns ~50% of Inkwala, Inkwala owns ~18% of a subsidary of Lonmin. So to correct the website, "'Cyril Ramaphosa' in fact indirectly owns 3% of a subsidary of Lonmin. There, something from the article refuted. Of course you could do the same with any part of the article yourself if you were not intellectually lazy, the entire article is half truths and lies.

      neil.harris.370177 - 2012-09-17 13:13

      Michael lets say your numbers are in deed correct, Your figures are based on Lonmin's total profits a company which operates in multiple jurisdictions. I think your figure of 3000 is incorrect even for MArikana. So dont look at a total companies operations as the available amount of distribution. Question what is the profit margin for Marikana alone?

      michael.barns.1 - 2012-09-17 14:14

      Well Neil that argument is just dumb to say the least. So if mine (a) makes R1 billion profit and mine (b) makes R5000 profit, would it be fair to say by your argument that the workers at mine (a) should be paid a HUGE salary and the workers at mine (b) should be paid almost nothing? I wonder why you are not the head of a major company, hmmm....

  • gary.scande - 2012-09-17 07:55

    damage enough property and get your own way, the SA motto it seems

      michael.j.anderson.144 - 2012-09-17 08:02

      I would also damage property if some oligarch was stealing more than half my salary... Check this out... The miners ARE earning R12,500. It's just that Cyril Ramaposa, who owns the labour broker that the mines go through, takes more than 50%. They get 12,500; Cyril gives R5400 and pockets the rest. I pay less in deductions and tax than a miner does!

      blip.noodlum - 2012-09-17 08:15

      That marikanatruth website is pure fiction. Snapped up by gullible conspiracy theory fools. LOL!

      kevin.watson.7906 - 2012-09-17 08:24

      Michael maybe, just maybe is propaganda put out by those helping the strikers. What would be interesting is to get the actual figures. What all the underground workers earn divide this by the number of workers and then see what the average wage is. If as you seem to believe that they are already earning R12 500 then the solution is simple, pay it directly to the Miners with all the correct tax uif and union dues deducted. You are seriously dumb if you think that with such a simple solution Lonmin would lose 2 months production at the mine. Words fail me in trying to describe your naivety.

      malcolm.james.macleod - 2012-09-17 08:25

      Stop believing everything you read. Just because it says truth in the URL does not make it true, that web page is full of half truths used to push an agenda. You should be ashamed of yourself for blindly believing and spreading such nonsense.

      fussed.anderson - 2012-09-17 08:26

      But havent the gov done away with labour brokers, if not why does no one investigate this and report back???. One for Cart Blanch I think

      darren.raath.5 - 2012-09-17 09:28

      @michael. once again you bring up a subject you know nothing about.a worker who cannot find a job due to high unemployment will by his own choice,put his name down with a broker in the hopes of eventually securing a job,any job. a wage will be negotiated between the employee and the employer,via the labour broker once a position has been found.the broker then puts on a fee and charges the client,not the worker.the workers fee is already negotiated,and if he does not like the wage he has a choice not to take the position. i havent read a single report in the press that says these rock drillers are employed through a broker,and if they are they have a choice to leave and find alternative employment.

  • jean.tredoux.5 - 2012-09-17 07:58

    Lonmin has done more than their fair share, an almost R2000 increase?! I supported an increase for the miners but not R12500, the miners must be arrested now, they're a danger to this country and people, especially to those that gets employed by mining companies!

      jean.tredoux.5 - 2012-09-17 08:32

      Miners that's returning to work are already being intimidated and threatened by their own... So please for one day just use that brain.

  • aroka.murombe - 2012-09-17 08:18

    But ramaphosa is buying an 18 million buffalo. Fair enough ne

      dale.seema - 2012-09-17 08:47

      I think Ramaphosa is planning to get married soon and thought taking out 100 cows for lobola is much too steep and rather buy a buffalo for the inlaws

  • Tiyani - 2012-09-17 08:23

    The CEO gets R15,3mil a year, Lonmin is insulting the most important people in the company, The Hard Labourers. Remove the most useless person, the CEO.

      malcolm.james.macleod - 2012-09-17 08:30

      Doing that will allow for them to increase the offer by R69, which is still well short of what is being asked for. The company would then go bankrupt within a few months (as contrary to what you believe a CEO is actually rather important and needed)

      malcolm.james.macleod - 2012-09-17 09:06

      Am I a CEO? No I wish... I'm just a hard working 'lower middle class' person who happens to understand how economics and companies work. While I don't agree that CEOs should be paid what they are I can equally see the stupidity of claiming they are useless and add no value (or that they should earn the same as manual labourers)

      deon.louw.7505 - 2012-09-17 09:09

      With no CEO the company will go bust within 3 months, rather remove those that does not want to work.

      stephen.chisadza - 2012-09-17 09:20

      Dude, the fact that the mine continues to exist after the miners have not reported for work for over a month suggests that they are not that important. If the board and senior management went AWOL for two months there would be no Lonmin, and NO JOBS!

      blip.noodlum - 2012-09-17 09:36

      Without THAT CEO the company would sail on regardless. All structures and contracts were in place before he got there and they'll be there long after he's dead. These over-valued overpaid overrated "executives" just arrive like puffs of gossamer, floating in headhunted via the old-boys' network, and they do little more than clip the ticket put under their noses. A cardboard cutout at the top of the boardroom table and a coin-tossing tealady could just as effectively make any of those so-called "executive decisions". - 2012-09-17 10:32

      @blip - interesting take on this matter. Im sure you have arrived at your conclusion due to the fact that you probably are the tea-lady in your company. Fact is that the modern-day corporation needs a CEO's expertise to steer it effectively. Take him away and you have a rudderless ship.

      lynette.venter.12 - 2012-09-17 14:56

      blip - just a quick question. You say " All structures and contracts were in place before he got there and they'll be there long after he's dead" now I'm wondering who do you think put these contracts and structures in place? The tea lady? LMFAO!

      blip.noodlum - 2012-09-18 10:44

      Well, it certainly wasn't Ian Farmer, who pays himself over 200 times the wage of the RDOs, and who rakes off more lucre from himself and his 9 brigand-directors than he pays out to his 3200 RDOs... Face it -- dozens of ANC deployed cadres have been parachuted straight into boardrooms with not one day's actual business experience -- let alone expertise -- and the companies have sailed calmly on as usual, making the usual profits and paying the usual fat fees to the fatcats on their usual boards of brigandage. It's really much easier than they make it out to be but they prefer keeping that truth secret.

  • roy.wadhams.1 - 2012-09-17 08:40

    These people are to understand that you and are being mislead by Malema and others and that this increase is and will cause the downfall of the economy and in the end no body is going to gain anything.

  • aroka.murombe - 2012-09-17 08:41

    I cn hear sum saying south africa does nt hv enough money to pay wrker de 12.5 they r demanding but zuma is build a 2billion town daz dat hv logic. And at whose expanse is de twn going to b build? I tink its at those wrker expense coz they r the 1 hu r paying tax, bt yet dey cn nt get wat dey deserve

      irma.white.9 - 2012-09-17 14:26

      Government money is completely irrelevent because these are people working for a PRIVATE company, not a goverment department.

  • andynct - 2012-09-17 08:46

    "Lonmin: We can't meet pay demands" I'm sure if they got rid of most of the workers and mechanized they could afford the higher wage demand.

  • michael.barns.1 - 2012-09-17 09:07

    Would you just like to explain to us mortals how R12500 for 3000 striking employees would cost R2.3 billion?

      malcolm.james.macleod - 2012-09-17 09:10

      They obviously have to increase the pay for the others who are not striking as well, they have a workforce of ~18000... Are you being deliberately obtuse?

      darren.raath.5 - 2012-09-17 09:36

      thats probably per year and yes it is very much feesible.R7000-R8000 additional(they earn about R4000-R5000 times by 3000 times by 12 = about R2,3 BILLION.

      michael.barns.1 - 2012-09-17 09:40

      darren your maths is shocking, its R288million... thats 10x what you just said. And Malcolm the others arent striking, it is only 3000 of them that want a better pay, they are supposed to be the RDO's. And even 3000 are not RDO's. So I think you ARE obtuse

      michael.barns.1 - 2012-09-17 10:24

      yeah but we are not talking about them, we are talking about RDO's... the most dangerous job at the mine. You can't very well pay a secretary more than an RDO, ohh wait, they do!

      christiaan.vanvuuren.9 - 2012-09-17 16:17

      Have you seen the.papercuts on a secretary? Dont tell me its not equally as dangerous...

  • andre.botha.988 - 2012-09-17 09:11

    if you want to compare a rock-drill operator with a CEO, let them switch roles for a couple of days. I personally would love to see how that plays out!!the remuneration is there for a reason, a certain skill base=a certain remuneration level, hence the term "minimum wage". The entry level wage for a graduate directly out of varsity is R5000, if they are even lucky enough to recieve a job with no experience, and they want R12500? come on be realistic no. and if they say "but how am i supposed to feed my 35 children and 18 wives??" no one said u should try and populate the whole country!

      Ze Don - 2012-09-17 09:31

      That would entail people actually taking responsibility for their actions... you can't be serious! ROFL

      klasgoran.olsson - 2012-09-17 09:31

      Hey Andre. Sorry to say but according to your your comment, what is the message? I understand your comment as spreading very rude attitude. Where is the Rainbowapproach in your statement? Does SA benefit from this attitude? I am also an academic and I happen to know that, as an academic, your salary will raise during your carrier, how is this compared with the miners? I also believe there is a need and role for all categories ; workers as well as academics. The country wouldn´t survive without their workers.

      blip.noodlum - 2012-09-17 09:39

      The CEO turned driller would be dead from exhaustion. The RDO turned CEO will be lining up his overseas holiday and the work delegated to middle managers.

      andre.botha.988 - 2012-09-17 09:42

      hey k. I am well aware of the value of n degree and that it will apreciate over time, but my point in case is that the mine workers have a system called collective bargaining to increase their salaries over time, the key word being "Bargaining". if they use the systems that are in place, they may recieve a increase, all be it not what they want, but how often does one recieve exactly what you want? I am fully aware that they dont have the oppertunity to gain an increase in salary along with an increase in experience. that being said, one cannot compare their salary to that of the CEO of lonmin, as the 2 are worlds appart in terms of skill set and requirements. its always easy to throw your toys out of the cot and carry on like these bunch have, and always scream "we want more". as for your comment one my attitude towards this whole incedent, should i be happy or enthusiastic or positive about a 5 week long strike where people are murder just to get a salary increase and the economy is suffering as a result of a bunch of people who are only think about themselves and dont give a damn abouth the consequences of their actions??no sympathy

      darren.raath.5 - 2012-09-17 09:46

      @klasgoran. wheres the rainbow approach in (1)10 people killed including police(2)34 more workers gunned down(3)threats by these workers to(a)murder management (b)close the mine(4)rife intimidation which includes murder of fellow workers. sorry but i dont see the rainbow nation...???? ps your salary will rise but not by 400 %

      klasgoran.olsson - 2012-09-17 11:21

      Andre. Now you write in a much better style. I fully agree with your statements about negotiations and that you never get 100% of demands in this. But this is the way to do it, no doubt. Maybe you and me not fully agree with each other, but this is the way to debate. Your first comment was more about bad values without any facts. I am glad we now can "talk". @Darren, I am 100% against murdering, threatening or other kinds of violence. I have written about this in many other comments. I also see Malemas way of acting as bad and scaring. I can´t understand why all medias give that man so much space. Of course, there is freedom to speak openly in a democracy, but to give space in public to every single step that man take is very strange. My last statement is my values I confess :-)

      darren.raath.5 - 2012-09-17 14:01

      @klas. i here you and do agree to a certain degree.the problem is one that will not be sorted any time soon,if at all.the working population feel they are owed something and that every business owes them. they dont understand or see the whole picture.i fully agree with a reasonable wage,striking for more etc... but a line needs to be drawn and enough is enough.there is only so much they can have. if these ridiculous wage increments were given it would have serious consequences for the economy and would surely open the door to many many sectors,public and private demanding their excessive increases.

  • roy.wadhams.1 - 2012-09-17 09:17

    The reason why this increase cannot be given is because Cyril Ramaphosa and many other top ANC have their "fingers in the pie" and one can imagine what their loss would be.

  • jason.heineberg - 2012-09-17 09:22

    I just think its sad that someone has managed to convince these people that they have a right to that salary (R12 500) without them understanding how unfeasible it is. Someone needs to break it down for them so they can understand this pipe dream simply isn't possible and maybe they will calm down.

      pieterjohan.westhuizen - 2012-09-17 09:54

      By starters, try to explain that to Malema

  • july.nhlapo - 2012-09-17 09:49

    All of you that comment against miners here YOU are not working in mines nor staying in shacks. So shut up if you don't know what to comment unless you've experienced poverty!!!

      robynne.els.1 - 2012-09-17 09:56

      I may not be a miner or live in a shack but I have made decisions in my life to secure a future for me and my family! If these miners don't want to be miners and live in shacks they must go study and work hard to earn more not hold our economy hostage and toi toi to get what they want!

      JamesMWood - 2012-09-17 10:13

      I came from nothing, only had chicken necks and livers as a treat, but with hard work and at the age of 33, having taken sick leave only once for surgery and working an average of 85 hours a week I have a lot more than I had back then, car paid for and 2 properties that I rent out. Hard work doesn't kill but apparently striking and laziness does.

      irma.white.9 - 2012-09-17 14:28

      Oh I've experience poverty. I've gone hungry. I've had no electricity for months. I'm still not going to go killing people and demanding unreasonable salaries. Can YOU say you've experienced poverty, July?

  • darren.raath.5 - 2012-09-17 10:01

    what are the implications of giving in to these demands for the rest of the country. are the police,nurses,teachers etc also going to get tripled salaries. i certainly hope so.

  • abdulrazak.modak - 2012-09-17 10:12

    this stand-off can be settled by government intervention-----------if the ANC is serious about poverty alleviation, then here is a place to start----since lonmin cannot afford the 125oo demanded, citing a "wage/jobs" trade-off-----let the fiscus provide the balance that lonmin cannot afford, and, commit itself to its task of job creation/poverty alleiviation!-------that would also settle the "sleeplessness" symptoms of our esteemed president

  • irvin.mkhari - 2012-09-17 10:27

    If the mine can't meet workers demand,where is the rest of the money the mine made for the past years? Oh the britishes,europeans and americans took it all but they claim that they improve economy of afrcans,south africans.

  • marilizem - 2012-09-17 12:04

    How many police men were killed? Nobody ever mention those who gave their lives to protect our country.

  • bullardx - 2012-09-17 12:18

    id simply fire all of them striking.and hire new miners cuz de enuf unemployd ppl more then happy to earn 4-5grand.;p. no need for huge discussionsz while de economy is going down:p

  • lizelle.leroux.31 - 2012-09-17 13:21

    @ Michael, i think you forget that bonuses, overtime and and and is related to your salary you making your sums only on a R8000 increase but the miners earn about R9000 a month after tax including all their perks what will that amount to if they earning a basic salary of R12500.00 Im sure Simon Scott (Acting Chief executive) knows what his taking about he has qualified CA's, financial advisors who is giving him all the figures, so stop trying to look clever cause you not. In my opinion you obviously uneducated with a calculator or you just don't have a clue.

  • DSBennie - 2012-09-17 13:34

    Lonmin had 27,800 employees full time in 2011, lets say 25% of those are miners, to give them each R12500 a month would cost the company R86875000. The companies profit made in 2011 for the year was R321000000 BEFORE TAX, to pay the miners that much means that the company would start making a loss after 4 months

  • irma.white.9 - 2012-09-17 13:48

    These people should just be happy they are getting ANYTHING after the destruction they've caused!

      july.nhlapo - 2012-09-17 15:55

      Rubbish u wrote! Which destruction? #They deserve a decent salary. Why management refused to speak with them at 1st?

  • sifiso.msimango - 2012-09-17 13:55

    simple, if you greedy fat cats cant afford miners demand, pack your bags and go

      christiaan.vanvuuren.9 - 2012-09-17 15:48

      Simple then no one gets paid.... Idiocy will be our country's undoing

  • mikel.kiparski - 2012-09-18 09:57

    why do the keep harping on those that were shot,,,, WHAT ABOUT THOSE THAT WERE HACKED TO they not count.

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