Lonmin job cuts may ignite more unrest

2012-11-01 08:59

Johannesburg - Lonmin [JSE:LON] management and workers appeared on Wednesday to be shaping up for a new battle after the strike-hit mining company said jobs would be cut.

The world's third-largest platinum producer is scrambling to get back on its feet after a violent six-week strike at its Marikana mine that crippled production and led it to ask shareholders for $800m in a rights issue on Tuesday.

It also gave unions notice of a restructuring, with proposed job losses in its 25 000-strong work force expected to be implemented in early 2013.

"We haven't decided how many employees will be impacted. What we have said is we are freezing our production target at 750 000 ounces for the next two years," Lonmin spokesperson Sue Vey said.

"What we are doing is shaping the business accordingly."

The company had said earlier the strike would cause it to miss targets. With production almost halving in the three months to September 30, it has postponed its aim of increasing output to more than 900 000 oz a year.

The National Union of Mineworkers (NUM) said it would fight any job cuts.

"Of course, we are in principle opposed to retrenchments. We will discourage them from going on a restructuring process that would see any jobs being lost," NUM spokesperson Lesiba Seshoka said.

The union hoped to meet management next week, he said.

The timing of the move is delicate as a wildcat strike is still gripping the nearby Anglo Platinum [JSE:AMS] mines at Rustenburg - where police fired rubber bullets and tear gas at strikers on Tuesday - and Lonmin workers only having been back at work for a month since their strike.

Emotions are also still high after the police killing of 34 striking Lonmin miners at Marikana on August 16, the bloodiest security incident since the end of white-minority rule in 1994.

Tens of thousands of gold miners have also only returned to work in the last two weeks and layoffs at Lonmin could trigger sympathy strikes.

Gideon du Plessis of Solidarity trade union said he was not surprised by the Lonmin notice, but feared middle management rather than the roc-drillers who led the strikes would bear the brunt of cuts.

"The focus will be on management levels but that means they are punishing those who did not participate in the strikes," Du Plessis said.

"These innocent people are now casualties."

  • mastersvoice - 2012-11-01 09:09

    the Lonmin grave is being dug ever deeper. I would not be surprised if we are witnessing the end of days for Lonmin.

      bruce.williams.1044186 - 2012-11-01 09:21

      I don't think we will see the end of Lonmin but I'm sure that a lot of these guys will see the end of their jobs. They need to get rid of them once ans for all. It is a virus that is spreading to every industry!!

      sminx.r.mandla - 2012-11-01 10:07

      Don't be surprised if there's a government bailout for Lonmin since Cyril has shares there so he wouldn't want to see his investment go down the drain like that!!

  • afrikeni - 2012-11-01 09:25

    I am surprised, I did not expect this development...... NOT, perhaps only NUM as usual.

      heinrich.etsebeth - 2012-11-01 10:48

      Saw this coming from a mile away :P

      riaan.kruger - 2012-11-02 08:37

      even a blind person could see this,s in the maths...o ja...maths is a problem in this country

  • daleinn - 2012-11-01 09:28

    i think it goes beyond educating society to become responsible bread winners, government for not reducing the higher cost of living, you are either hanging lonmins by its noose or that of the people. I guess everyone is tired of watching comrades enrich themselves , while they do little to improve the lives of ordinary citizens.. no it does not end with water, sanitation , and houses.. but starts with decent jobs, cutting electricity costs,fuel,and tax burdens, that increase operational costs, creating more infrastructure and development to the economy in basic food and transportation costs.

  • Philip Nel - 2012-11-01 09:32

    What did the miners think was going to happen . They did this to themselves .

      winifred.watson.9 - 2012-11-01 09:48

      There are always consequences and it is going to come back and hurt the miners. If a tsunami catches you unprepared, you clean up and prepare yourself incase another should hit. That is exactly what Lonmin are doing, they were caught unprepared and now they are preparing themselves for the future. Unions must also realise they cannot hold business to ransome without any they will be feeling it where it hurts most....job losses.

  • berni.venter - 2012-11-01 09:32

    Cause and effect people! Time for the unions to catch a wake up. Pointless fighting for unrealistic increases at the cost of creating new jobs.

  • John.Yossarian22 - 2012-11-01 09:37

    More unrest? Soon there won't be any more retrenchments at Lonmin. There won't be a company, and there won't be any employees.

  • clint.rusford.3 - 2012-11-01 09:44

    Seriuosly now if u didn't see this coming then I don't know.. For every action ther will be a reaction. Its the freaking rule of physics and most certainly life!!!! If u stil can't comprehend pls watch WWE. WHAT gOEs up MusT COmE DOWN!

  • VWhitepaw - 2012-11-01 09:47

    Higher pay means less people can be paid. Meaning less jobs. The workload does not change. So... have to work harder also. It also means, the company can't grow to create more jobs.

  • terrylee.heuer - 2012-11-01 09:50

    Lonmin did warn that this may happen while the miners were striking so its not unexpected!!!

  • martin.brink.965 - 2012-11-01 09:54

    Rather a few steady jobs, provided for those who work according to company policy, than for a bunch of idiots with the \I demand\ mentality. I too have been forced to apply this policy, and I am probably not the only business owner to have done this.

  • altus.kirsten - 2012-11-01 09:59

    Lonmin is exiting SA over the next two years to venture into other African countries with less labour strikes and with better ROI prospects. More international mining companies will follow. SA has proven not to be the best country in Africa to invest in. This perception from foreign investors will not change easily. We need to Thatcher leadership to pull the power if unions or SA will loose more foreign investment.

  • sminx.r.mandla - 2012-11-01 10:04

    Always knew it was too good to be true, u can't expect to significantly increase salaries like that and expect the company run smoothly considering other higher fixed costs in the mining industry, with a low demand of platinum in Europe our biggest customer hampering revenues!!!

  • richard.bosmano - 2012-11-01 10:04

    Perhaps they could compromise and the entire workforce can stay on , if they take a paycut. Bwahahahhahaha

  • djim.bie - 2012-11-01 10:27

    Take note, mining is not that profitable.

  • pieterjohan.westhuizen - 2012-11-01 10:28

    The unions are allways broadcasting for job creation, why do they not ask their Chinese friends how do they create jobs, or rather ask your african friends where they are "helping out"

  • J.Stephen.Whiteley - 2012-11-01 10:34

    The government should now take the initiative and ban all strikes for one year. Any striker would then face instant dismissal and a heavy fine. How can a business survive when production is lost so drastically? Kathy

  • adele.hoffman - 2012-11-01 10:48

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